Japan’s butter stores milked dry

Posted by Isobel Drake on 19th May 2008

While the rising cost of butter is starting to impact on Australians, Japan is just battling to get any.

Most grocery stores in Japan have had to resort to posting “sorry – butter unavailable” signs, with the lucky few stores forced to ration the small amount of the product they receive intermittently. The shortage is primarily due to dairy farmers leaving the industry following a lack of demand for milk a couple of years ago, which resulted in a glut and much wastage. Additionally, many manufacturers have been using raw milk for fresh cream and milk-based beverages, which can prove more lucrative.

Further compounding the issue was panic buying by some consumers as soon as a shortage was considered possible. This led to a quicker decline in stocks than expected.

In Australia, dairy prices have been forced to rise due to higher costs of production caused by the increased cost of grain and fuel, among other factors. According to the Australian Retailers Association shoplifting of butter has increased this year as many battle with inflation and interest rate pressures. The price of butter has, however, not been rising as quickly as some other food products and there are no concerns about a shortage of supply in Australia.

Butter substitution by restaurants, bakeries and consumers has become commonplace in Japan and may become more prevalent here in Australia if prices rise much further. “We’re in trouble,” Seiko Nakano, a French-style bakery operator in Tokyo, told the Los Angeles Times. “We’ve had to come up with some new items that use less butter, like cookies. But you’re talking about flavour. How can you replace butter?”

Japan are now seeking to raise national production but, in the meantime, increased purchase of butter imports is likely to result. This should lead to Japan importing a record amount of butter this year and could see prices escalate even further.