Why is Butter So Expensive in New York State Right Now?

Butter prices in New York have never been higher, and they're only getting worse as we head into the holiday baking season.

Hudson Valley shoppers may need to take out a second mortgage to buy ingredients to make cookies this year. While inflation has started to cool down a bit for milk and other dairy items, butter is still outrageously expensive.

My wife is the queen of Christmas cookies. She begins to make her dough at the beginning of November so our kitchen can pump out endless trays of cookies during the weeks leading up to the holidays. While she handles all of the baking, it's my job to get the ingredients. Traditionally, this is the time that stores usually mark down butter, knowing that people will be getting ready for holiday baking. But this year, it seems like the price is only going up.

Local Butter Prices Are Ridiculous Right Now

I was shopping yesterday and was blown away when I saw that a pound of Land O Lakes butter was going for $7.50.  That's insane. I remember stocking up this time of year with a coupon that brought the price of the same pound of butter to something like $1.99.

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Luckily, some sales are going on this week, but they only save enough to bring the total down to what the retail price used to be.

Sale Prices Are Still a Bit Too Pricy

ShopRite and Tops Friendly Markets currently have sales on Land O Lakes butter bringing the price down to just under $5, which is a little better. Price Chopper has a digital coupon this week that allows you to buy three packages of Land O Lakes butter for $3.99, but you can only use it once. Sadly, these sale prices only bring the price of butter down to what it should cost before even using any coupons.

When Will Butter Prices Go Back Down?

It appears that these high butter prices will be sticking around for a while. According to an interview with Ben Laine of Terrain Ag and Dairy Heard Management, butter prices hit a record high this fall, and for good reason.

Domestic demand has been strong for butter. So I think we're getting to that time of year when retailers start getting concerned about are we going to have enough butter for the holiday season. That's the big demand part of the year. So I think you get that nervousness, you've got good demand already through this year, and relatively low inventories. Plus, as we start making more cheese, we're pulling some of that milk that would have otherwise been going into butter powder plants, and Class IV is now not quite available as much as it had been. So, it's driven to really high butter prices.

Unfortunately, butter prices are expected to remain high through the beginning of 2024 before eventually evening out later next year.