Butter supplies running short at supermarkets

Consumers are facing a double whammy as butter supplies are running short — sometimes even disappearing from supermarket shelves around Japan — and producers are planning to raise prices.

A sign at a supermarket in Shinagawa Ward, Tokyo, tells shoppers that the supply of butter is "unstable." Only margarine products are stocked on the shelves. KYODO PHOTO

Supermarkets and other retailers are suffering the butter shortages mainly because domestic production of raw milk has been reduced in the last few years due to sluggish demand for milk.

Increases in feed costs stemming from surging global grain prices have meanwhile made it difficult for dairy farmers to boost raw milk production by increasing the number of cows.

A sign put up recently by a supermarket in Shinagawa Ward, Tokyo, said "Today there will be no arrival of goods." In recent days it has not been unusual for the store to run out of all butter products.

"Products arrive only once a week," a sales clerk said. "All products sell out on the day of arrival."

Consumers will be hit not only by the supply shortage but also by planned hikes in butter prices.

Dairy companies such as Snow Brand Milk Products Co., Yotsuba Inc. and Morinaga Milk Industry Co. plan to raise their suggested retail prices for butter by 8 percent to 10 percent either this month or in May.

According to the Agriculture, Forestry and Fisheries Ministry, domestic production of butter from last April to January dropped 4.5 percent from the year before in volume terms.

Butter inventories at dairy companies have fallen 20 percent from a year before.

"It would be difficult to raise supplies of butter sharply any time soon," a ministry official said.

Shortages have been conspicuous since late last year, when demand for butter as an ingredient in cakes increased.

Reflecting the shortages, prices of butter for business use are also surging, making it difficult for some restaurants to offer bread with butter.

Domestic raw milk producers have reduced production after facing a glut stemming from a plunge in milk consumption.

Another factor reducing butter supplies is expanding demand for dairy products in China. Also, raw milk demand for cheese production is rising in Japan.

An official at Yotsuba, which holds the second-biggest share of the domestic butter market, said it would be difficult to boost shipments immediately.

"Even if producers increase the number of milk cows, it will take two years for cows to mature to the point they can provide milk," the official said.