Butter prices are soaring, causing a commercial bakery in Southland to look for more affordable options globally.
Kaye’s Bakery in Invercargill, known for its Belgium biscuits and afghans, relies on butter from Australia to create its products. Luella Penniall, owner of the family business, imports 10 tonnes of butter at a time.
Despite being in a major dairy region, it is too expensive for the bakery to purchase butter directly from New Zealand dairy companies. Therefore, they opt to buy from an Australian broker.
Penniall expressed a preference for supporting Kiwi farmers but acknowledged the cost difference between Australian and New Zealand butter. The bakery recently considered using American butter to reduce costs, but the higher water content was not suitable for their manufacturing needs.
Customers choose Kaye’s biscuits for their buttery taste, so replacing butter with margarine is not an option. However, the rising prices of key ingredients will soon lead to price increases for their products.
With butter prices reaching $14 to $15 per kilo, compared to $11 per kilo three years ago, the bakery faces challenges in maintaining quality while managing costs.
Despite a slight decrease in butter prices at the latest global dairy trade auction, the overall trend shows a significant increase in butter prices over the past year. This rise in prices is expected to continue, impacting dairy farmers and consumers alike.
