Coronavirus 'literally trimming fat' from butter and cream prices

The premium commanded for butter and cream over milk protein has dropped because of the pressure restaurants and food service businesses are under. Dairy auction prices fell for the third consecutive auction on Tuesday night. Overall dairy prices dropped by 1 per cent, while whole milk powder dropped 2 per cent and butter dropped 1.2 per cent. The only category to gain was skim milk powder, the price for which rose 1.8 per cent. Westpac senior agri-economist Nathan Penny said Covid-19 was “literally trimming fat” from prices. “Creams and butters are heavily exposed to restaurants, bakeries and other food service outlets. Think indulgent restaurant desserts and pastries. And Covid restrictions coupled with a general reluctance of people to eat out has reduced demand for these products,” he said. Milk fat prices had dropped over 20 per cent post-Covid and did not look like they were set to rebound. They were at their lowest level since mid-2016, when scientific evidence had shown ...