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France Is Running Out of Butter For Its Croissants
By Geraldine Amiel
France’s much- loved croissant au beurre has run up against the forces of global markets.
Finding butter for the breakfast sta- ple has become a challenge across France. Soaring global demand and falling supplies have boosted but- ter prices, and with French supermar- kets unwilling to pay more for the dairy product, pro- ducers are taking their wares across the border. That has left the French, the world’s biggest per-capita consumers of but- ter, short of a key ingredient for their sauces and tarts.
“The issue is pure- ly French and is related to the fact that there’s a price war raging between French retailers,” Thierry Roquefeuil, chair- man of the milk- producers’ federa- tion FNPL, said in a phone interview from his farm near Figeac, in Southwestern France. “French retailers refuse to increase prices, even by few cents, even for butter. Dairy producers
see that there’s an outside demand at higher prices so they sell abroad, and rightfully so.”
Global butter prices have almost tripled to 7,000 euros ($8,144) a ton from 2,500 euros in 2016, according
to Agritel, an Paris- based farming con- sultancy. In Europe, prices peaked at about 6,500 euros a ton in September, the highest since
the European Commission began collecting such data in 2000.
While France’s Food Retailers’ Federation is underplaying the shortages as a temporary logisti- cal problem linked in part to people hoarding butter, the issue made it last week to the floor of the French parliament. Questioned by law- makers, Agriculture Minister Stephane Travert said he hoped a deal could soon be found between retailers and dairy produc- ers.
“I want to reassure all the consumers that soon butter will find its way
back to shop shelves and con- sumers won’t be deprived of this French commodity that does honor to French tables and is the pride of French dairy pro- duction,” Travert said in the National Assembly on Wednesday.
A report released Saturday by the consulting firm Nielsen showed that 30 percent of butter demand in French supermar- kets wasn’t met between Oct. 16 and Oct. 22. The proportion was as high as 46 percent in some stores, mostly due to hoarding, it said.
The problem can be traced to the end of milk-produc- tion quotas in April 2015 that led to a glut early last year
in Europe, and a drastic drop in prices. This prompted produc- tion cuts by spring this year.
The reduction coin- cided with other global milk prod- ucts exporters curbing their own output: the U.S. stopped selling abroad to address higher domestic demand while New Zealand, the world’s biggest dairy exporter, experienced lower production due to droughts, Pierre Begoc, an Agritel analyst, said in a phone interview.
“The butter short- age in French supermarkets is the direct conse- quence of the 2016 milk crisis which prompted a 3 percent drop in production,” Xavier
Hollandtsni , a Kedge Business School strategy teacher and an expert on agricul- tural matters, said in a note Thursday.
The butter market also encountered a push from the demand side. Butter and cheese remain the dairy products in highest demand, especially in Asia, according to Agritel’s Begoc.
“Global demand started to pick up, with China starting to buy again after having stopped for a few months to tap into its stocks, leading to a sub- stantial rise in milk and butter prices,” Begoc said.
French retailers have not adapted to the new market reality and have kept a cap on
prices, Roquefeuil said. For French dairy companies, it’s easier to export to countries such as Germany, where retailers are willing to pay a higher price, he said.
“There’s an evolu- tion of butter con- sumption,” he said. “Demand is strong and the industry has to adapt to the new consumption.”
The shortage in France has been compounded by a panicked rush by consumers to stock up in the past few weeks. The food retail group has said any butter shortage will be short-lived.
Industry projec- tions show that after the recent peak, butter prices may head down slightly as milk pro- duction is now picking up, Agritel’s Begoc said.
That should come as a relief to French consumers who need butter for not just their tartines and crois- sants but also for cooking sauces and baking every- thing from a tarte tatin to an eclair au chocolat.
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