Why people are buying more butter

Darren Gray
May 16, 2012
The Age

AUSTRALIANS are putting more butter on their bread and in their cooking, and are eating more yoghurt and drinking more milk, according to a national snapshot of the dairy industry.

Sales of butter and butter blends rose 9 per cent in the March quarter (compared with the same quarter in 2011), while milk sales (up 5 per cent) and yoghurt sales (up 4 per cent) also rose. The increases for these three items for the full year to the end of March were between 2 and 4 per cent.

The sales growth is outlined in Dairy Australia’s latest report on the industry, the Dairy 2012, Situation and Outlook.

While the sales growth is a solid base for the industry, the report highlights a number of challenges facing dairy farmers. It forecasts that milk prices paid to Victorian dairy farmers are likely to drop 10-15 per cent in 2012-13, compared with 2011-12, largely due to growth in global milk supplies.

Favourable seasonal conditions in Australia this year have lifted national milk production to 9.5 billion litres, the highest in a decade. Some of the growth came as cows produced more milk. Average annual milk production by a Victorian cow is forecast to rise to 5882 litres in 2011-12, almost double the figure for 1979-80 (3012 litres).

Joanne Bills from Dairy Australia said the dairy sales volume figures include supermarket sales, sales to the food services sector (restaurants etc) and sales to food makers.

Butter prices had fallen considerably over the past year, she said. “For a lot of ingredient users butter would probably be a more attractive option now than it was this time last year.

I think there’s probably still a bit of a MasterChef influence … just this general interest in cooking things has carried through to butter demand,” she said. A noticeable industry trend, Ms Bills said, was for larger dairy farms to expand further. “It’s those farms that have taken the step, started employing people and are milking 500 cows plus that are looking to expand,” she said.

Longwarry farmer John Versteden is one such dairy farmer planning to expand. He plans to build his herd from 650 to about 720 next year.

Mr Versteden is confident about the outlook for Gippsland dairy farmers. “I think it’s reasonably positive. There’s a little bit of talk of a slight downturn in prices at the moment, and whether that’s a bit of market correction I’m not sure. But given that we have reasonable seasonal conditions, I think dairy farmers are very good at adapting to fluctuations in price and this is not a volatile fluctuation. It’s something that will be relatively smooth,” he said.

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