Why Are Butter and Margarine so Expensive?

So, you already know eggs are expensive, but there are two other grocery items that might have your budget screaming: butter and margarine. But why exactly are butter and margarine so expensive right now?

The rising cost of butter and margarine is down to a few factors, but there might be some hope on the horizon.

Let’s start with the rising cost of butter. According to CBS News, dairy farmers thinned their herds in 2020—during the height of the coronavirus pandemic—after financial struggles arose. A thinned herd means less milk production, and milk is (obviously) required to make butter. Much of the milk supply was then used to make cheese—not butter. This has resulted in supply issues and high prices.

CBS News, however, spoke with Peter Vitaliano, chief economist at the National Milk Producers Federation, who said he expects farmers to bolster their herds in 2023. This should alleviate a bit of the production issues, and hopefully, prices should begin to drop over the next several months.

But what about margarine? Many varieties don’t include dairy at all, so what’s the problem? It’s the oil. Margarine is predominantly made from vegetable oils like soybean and sunflower, and the United States gets much of them from Ukraine. Given the war in the country, supply and exportation have become issues leading to price increases.

Of course, there are also natural disasters. Exporters like Argentina and Brazil have experienced major droughts, cutting their supplies as well. While the outlook for butter seems to be positive, the same isn’t true for margarine. Prices are likely to remain high throughout much of 2023.

Your best bet for now? Look for ways to save money at the grocery store and use cooking hacks to extend your meals. Invest in some leftover containers, too. But if you’ve wondered exactly why prices are rising, at least now you know.