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Elevate Magazine
May 13, 2025

Retail butter prices rise as global dairy costs surge

retail butter
Photo source: Getty Images

The worldwide surge in dairy prices has also led to an increase in retail butter prices.

The Global Dairy Trade auction price for butter has increased from US$6,631 per metric ton in December to US$7,992 in the most recent auction.

Stats NZ reported that the average price of a block of butter in March was $7.33. This represents a 10% increase from the December price of $6.66.

This week at Woolworths, their home brand butter was priced at $8.49. The supermarket said it is making every effort to keep butter prices as affordable as possible.

“With the recent rise in price, early trends are showing a minor reduction in the volume of butter purchased. The driving factors here consist of customers switching to dairy or table spreads, reducing their butter buying frequency, or ceasing purchases altogether,” a Woolworths spokesperson explained.

“Market conditions have changed significantly in the last few months, and international butter prices are now at record highs,” the spokesperson said. “While this is great news for our farmers, it does mean we have to pass on these increased prices to our customers, which is why we’ve changed the shelf price for butter products.”

Meanwhile, ASB senior economist Mark Smith said, “The reason probably why the butter prices have been so high is that the dairy supply is being reasonably constrained in the European market, and it’s contributing to what we’re seeing here.”

Smith also stated that US tariffs might affect the global movement of dairy products.

New Zealand exports a notable volume of dairy products to the US, but these shipments could be redirected to other markets. This would likely lead to higher dairy prices for US consumers.

For New Zealand consumers, according to Smith, “We could see the reverse if some product that was heading for the US actually headed elsewhere.”

Smith said the demand for New Zealand products is expected to remain strong due to the country’s efficiency in production, although overall tariffs are likely to have a suppressing impact.