|Butter Brings Bakery Blues|
|Key Words||Prices, Production, Output, Consumption|
The prices of some bakery items are increasing. Customers do not understand. One bakery has actually put up a sign apologizing to customers. But it is not the fault of the bakery. The culprit is the rising price of butter, which has gone from $1.72 a pound at the beginning of the year to $3.19 by early October. In fact, prices in grocery stores have been as high as $4.89 for name brands and $3.99 for off-brands. This is significant: each batch of peanut butter cookies calls for one stick of butter that costs more than a dollar.
Butter prices are up in part because of declining milk production. The number of dairy farms has decreased from 100,000 to 92,000 over the past year. Moreover, a wet winter and a dry summer in key milk-producing states such as California and Texas reduced milk output.
Over the long term, consumers have increased their consumption of butter from 3.7 pounds per capita in 1991 to 4.2 pounds in 1997. Also, as the holiday season approaches, more people are baking, wanting more butter.(Updated December 1, 1998)
|Source||Stephen Huba, "Butter price doubles", Cincinnati Post, November 10, 1998.|
Return to the Equilibrium Index
©1998 South-Western College Publishing. All Rights Reserved webmaster | DISCLAIMER