Gold bars

Higher butter prices are starting to bite, writes Shane Gilchrist.

Behold the croissant.

Actually, behold a rather large lump of dough on to which baker Kevin Gilbert lays three slabs of butter and folds the mixture time and again, all the while explaining just how that saturated fat will go to work once he slides his concoction into a large oven.

Baker Kevin Gilbert ponders the price of butter as he makes croissants. Photo: Gregor Richardson
Baker Kevin Gilbert ponders the price of butter as he makes croissants. Photo: Gregor Richardson

A good croissant, ultimately, comes down to chemistry. Butter contains both fat and water. The latter expands (as steam) when it is heated;  the fat, meanwhile, allows those layers to separate and the steam to escape. The result? Numerous micro-pockets of air within the pastry. Or, in other words, a mouth-watering bite.

Yet butter is starting to leave a sour taste, too, as its price continues to rise as surely as the best baking.

This week, at Fonterra's latest fortnightly global dairy trade (GDT) auction, butter set an eighth price record for this year, fetching $US6026 per tonne, an increase of 1.2% on the previous auction, which in turn had seen a 3.8% fortnightly rise.

The trend is reflected in our domestic butter price, which has hit a record high of $5.49 in recent weeks, more than double what it was at the same time last year. (A recent Otago Daily Times scan of Dunedin city supermarkets found prices between $6-7 depending on brand.)

Predictions the global dairy trade will continue its trend upwards might be good news for farmers, but in South Dunedin - specifically, at the Gilbert's Fine Foods operation run by Kevin and his wife Esther - such high prices are starting to hurt.

The couple point out it's not only butter that's an issue. Their bakery business also uses plenty of milk powder, milk and cream. Although they've been absorbing those dairy cost rises for months, there could come a point when their customers, too, get a taste of the wider forces at play.

''With prices going up, we might have to look at other options but we plan to hold out as long as we can,'' Kevin says.

''There is a ceiling as to what we can afford and what the customer would be willing to pay.''

In front of him, that slab of dough comprises almost a third butter, more than $30 worth. Were he making laminated brioches, the composition of butter to flour would be split roughly down the middle. Yum. Ouch ...

''It would be our most expensive bread, although our most expensive item by weight would be a Danish, which also comprises eggs, milk and cream. Croissants or Danishes require lots of butter.''

Saturated fat does various things in baking. It shortens the gluten or, what we refer to in baking as `shortening the bite'.

''Compare a good chewy bread to a soft bun - a big part of the difference is, in the latter, the fat has coated the gluten and inhibited its development, so the result it is a lot softer, or 'shorter'.''

There are bakeries in France that have stopped using butter simply because of the high price. They substitute butter for margarine.

''It's a scenario this Kiwi baker is attempting to avoid.

''Sure, we can replace butter with margarine, but the flavour of butter is distinct and it is so much richer. The melting point of butter is closer to body temperature, and that's why it feels so creamy in the mouth.''

Image: ODT
Image: ODT

Though the reason why butter is fetching record prices might seem simple enough - a primary-school lesson in supply and demand - a look at the wider picture reveals the ebb and flow of consumer taste, a dynamic often driven and modified by media attention to notions of dietary science.

A series of high-profile articles, including a cover story in Time magazine in 2014, as well as a piece in the New York Times, have cited a growing body of research challenging earlier links between saturated fat and heart disease.

Several meta-studies, including a major review of scientific studies on fat by the American Journal of Clinical Nutrition, concurred that refined sugar and processed foods were more to blame for obesity, diabetes and other weight-related diseases than saturated fats.

ASB rural economist Nathan Penny says this widespread coverage dovetailed into other dietary thinking, such as the whole food movement, sparking a resurgence in demand for butter that started in the United States but spread to Europe and elsewhere.

''There has been a trend back towards whole products, which has been quietly changing the dynamic of what's on our supermarket shelves over the past few years,'' he says, citing as an example the growth of New Zealand brand Lewis Road Creamery.

Nathan Penny.
Nathan Penny.

''Dairy producers haven't been able to produce fast enough to meet that big shift in demand, so we are seeing record prices globally. If you look at dairy auctions, which are held every two weeks, the butter price has set seven record highs this year. This is being driven by demand.

''The situation in New Zealand is not unique. Butter prices are high everywhere. In France, there is talk about bakers having to put up the price of pastries and that's a big deal,'' Penny explains.

''I don't think this will correct any time soon. I expect some more record prices this year.''

The flipside is the potential for higher incomes for our dairy farmers. About 60% of the total milk price farmers are paid is comprised of whole milk powder. The remainder is based on milk fats, including butter.

''At the moment, farmers are being paid around $6.75 per kg of milk solids, which means most are making a profit. Two years ago, the price was down around $3.90. I think milk solids prices could get up to $7.''

(Australian consumers, too, have seen a strong rise in butter prices. A recent article confirmed Supermarket chain Coles had raised the price of its own-brand butter by more than 20% to  $A4.40 for a 500g block in the space of a month; and Woolworths' online prices for own-brand butter was around $A5 per 500g.)

Helen Leach, author of a number of books on food's cultural implications, believes our taste for butter won't melt any time soon.

''Given that most of our home baking is dependent on butter for a good outcome, and has evolved with butter as its primary fat, the lack of any real substitute will keep us buying butter for baking, despite its price.''

Helen Leach.
Helen Leach.

An emeritus professor of anthropology at the University of Otago, her 2014 book, Kitchens: The New Zealand Kitchen in the 20th Century (Otago University Press), features a detailed history of butter use in New Zealand, including its rationing during World War 2 as well as the competition it faced from substitute spreads.

''During the 1960s many in the medical profession began to suspect that saturated fats might be implicated in coronary heart disease. They recommended that some patients should replace butter in their diet with polyunsaturated margarine made from vegetable oils,'' Prof Leach writes.

''When Consumer surveyed margarines in October 1972, polyunsaturated margarines were being imported from Australia but were available only to people with a medical certificate.''

The New Zealand Women's Weekly joined the debate when it published John Yudkin's defence of butter in early december 1972. Yudkin believed that sugar posed a greater threat than saturated fats.

''Despite this opposition, strong lobbying by the National Heart Foundation saw the 1908 Margarine Act [designed to protect butter from competition from substitutes] amended to give all consumers the choice of butter or polyunsaturated margarine."

... To those New Zealanders trying to come to terms with `health foods', `whole foods' and `natural foods', polyunsaturated margarine was a conundrum; although it was `healthy' it could not be described as `natural'. But it was here to stay ...

Kevin Gilbert has been in the baking industry for more than 25 years. He has seen food trends come and go - ''if you eat this it will kill you ...'', ''eat this and you'll live 10 years longer ...''.

''When I first started baking, we were at the tail-end of cottage cheese being some miracle food, that if you put cottage cheese on anything it became a diet food. We now have gluten-free ...'' he trails off, his point made.

Still, market mood swings have obvious benefits, Kevin and Esther agree.

''There has been a rise in what you'd call the conscious consumer who is interested in  business' ethics. They will shop at a business they feel is making things honestly and can identify what's in their product,'' says Kevin.

Esther: ''I think there is a move back to more old-fashioned baking in regards sticking to real ingredients. Our customers want to know what's in their food. They don't want it stuffed full of all sorts of products with numbers.''

Research has proven a consumer will pay more for products that are ethically sourced or environmentally sustainable or local.

''Whether they will pay for our products given the cost of butter remains to be seen.''


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