Published on 11/04/98

Butterfat Shortage Good News for Georgia Dairies

When shoppers reach for the butter for their holiday cooking this fall, they won't see any good news in the butterfat shortage that has sent prices soaring. But dairy farmers will, said a University of Georgia economist.

"This is really having a positive effect on butterfat, and therefore milk, prices," said Bill Thomas, a dairy economist with the UGA College of Agricultural and Environmental Sciences. "When I say positive, I mean for the farmers."

In 1997, farmers essentially paid their processors so they could produce milk. "Georgia dairies have been losing about $1.86 for every 100 pounds of milk they produce," Thomas said. Each hundredweight equals about 11 gallons of milk.

But as butterfat has become more dear, farmers are finally getting paid more for their milk.

"As we go into the holiday baking and party season, people will buy more dairy products that are rich in butterfat: sour cream, butter, cream, rich cheeses," Thomas said.

Americans use more butter and butterfat-rich products during the winter holidays. In-home baking, restaurant meals and packaged baking mixes will use lots of butter and other rich dairy products.

"And that will keep the demand high, supporting prices to farmers," Thomas said.

Dairy farmers' payments for milk are based on the butterfat content. The standard is 3.5 percent butterfat per hundredweight of milk. They receive a premium for every one-tenth percent over that.

Thomas said the premium now is about three times what it was last year -- 32.5 cents now from 10.6 cents in September 1997.

"They're still not making much," Thomas said of Georgia dairies. "They are making money but have not recovered from the losses they had over the past several years."

And as the holidays approach, the weather cools off. That's more good news for dairy farmers. During hot weather, cows give less milk that's less rich. With a carefully planned diet, farmers can get more and richer milk from their cows.

Thomas said the feeds that can increase butterfat content were in short supply and were costly through the summer.

"But as prices come down and availability goes up for that feed," he said, "farmers can increase the butterfat content of their cows' milk and increase their income accordingly."

The breed of dairy cows affects butterfat supplies, too. The Dairy Herd Improvement Association has records on about 60 percent of Georgia's dairy herd. They test the milk from members' herds and keep records on the cows.

Holsteins' milk has about 3.5 percent butterfat. Jerseys, only 4 percent of Georgia's herd, produce milk with about 4.3 percent -- almost a quarter again as much butterfat.

"This butterfat shortage might make farmers decide to buy a few Jerseys and increase the overall butterfat content of their milk," Thomas said. "There is a tradeoff, though. Jerseys produce less milk volume."

But that decision could pay off in the long run.

"Americans are switching back to butter and butter products," said Connie Crawley, an Extension Service nutrition and health specialist with the UGA College of Family and Consumer Sciences.

Sometimes people go back to butter for the taste. And sometimes they switch because of concerns about trans-fatty acids, which can be high in stick margarine. Crawley said trans-fatty acids may be as likely to raise blood cholesterol levels as saturated fat.

"Really, the question people need to ask when choosing fats is 'how often do I use this product?'" Crawley said.

If you use margarine or butter fairly often, you may want to choose soft or liquid margarine. These products are lower in trans-fatty acids and have no cholesterol.

If you use butter or margarine rarely or for special holiday recipes, Crawley said she wouldn't be too worried about using real butter. "The key here is moderation," she said.