Croissant prices rise amid French butter Lack

France is running short of butter, with some supermarket shelves sitting vacant and the cost of croissants on the increase, creating a headache for the government as it attempts to create the food chain more powerful for farmers.

The shortage is caused by falling milk production and increasing butter demand internationally, with consumer attitudes towards the spread, once shunned as unhealthy, becoming more favorable.

As a consequence France has been caught short. Soaring costs and decreased dairy supplies have put strain on manufacturers and food companies, with some stopping deliveries and considering passing higher costs onto retailers and shoppers.

Makers of baked products like croissants, where butter makes up about a quarter of their material, have been grappling with a doubling of butter costs in the past year to record levels over 6 euros ($7.05) a kilo.

Talking in his traditional bakery in Paris, Samir Kichou stated he hadn’t yet increased his costs because of additional butter expenses but may need to soon.

“Since the year-end holidays are coming, with Christmas preparations and especially the ‘Galette des Rois’ cake that needs a good deal of butter, if there isn’t a substantial decline, we’ll be forced to pass on the purchase price increase,” he said.

European dairy processors and food industry groups have been warning of a squeeze, with Danish-based combined Arla Foods stating in August the continent could face shortages by year-end.

Supermarkets in the funds and others parts of France have left gaps in their own butter sections, with a few stores displaying signs describing a shortage for certain brands.

Dairy farmers complain that they get little benefit from soaring butter markets, arguing that what they’re paid is more often tied to cheaper raw milk and milk powder rates.

“The thing is that on the French market the perfect signal wasn’t given to dairy farmers, because prices weren’t adjusted in connection with the fall in dairy supply,” said Dominique Charge, president of France’s federation of milk cooperatives.

The butter-supply worries highlight the challenges faced by President Emmanuel Macron to honor an election pledge to change practices in the food chain so farmers get a better deal.

Agriculture Minister Stephane Travert played down the suggestion of acute shortages, but told parliament on Tuesday that retailers and providers should agree price adjustments to be able to maintain deliveries.

The dairy industry has shown signs of adjusting, with butter prices easing and milk output expected to pick up in the second half of the year, but the impacts of the crunch could linger before the peak holiday demand period at the end of the year.

Courtesy: The Globe And Mail

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