ABI Says Markets Are Adjusting To Rise in Butter Prices

Industry “Needs To Remind Consumers That Our Products Are Worth It,” President Says

ARLINGTON, VA – The recent rise in wholesale butter prices has triggered the importation of foreign butter into the U.S. – evidence that the domestic marketplace is adjusting to current pricing conditions, according to the American Butter Institute.

Tom Hughes, President of ABI, said today that trade sources have reported that 2,000 metric tons, or 4.4 million pounds, of butter has recently entered the U.S. on an over-quota duty-paid basis. The butter imports are consistent with the terms of the 1994 GATT trade accord, which allows 5,777 metric tons of butter imports at a lower duty, while imposing higher duties on any amount of foreign import above that threshold. The 2,000 metric ton import was assessed the higher duty.

Hughes said today that “not only should dairy industry leaders have faith that markets will adjust to supply and demand conditions, but that consumers will continue looking upon our products as worthwhile and valuable.”

“Butter is a competitively-priced product, which consumers prefer over substitute products,” Hughes said. “I strongly believe people recognize the essential value of the properties of butter, such as its superior taste and cooking quality. At a time when butterfat is in high demand, we need to keep reminding consumers that there’s a basic reason for that demand: butter is worth it.”

The ABI President said the movement of imported butter into the U.S. is proof that the U.S. Department of Agriculture need not adjust the existing U.S. butter quota to allow for additional imports to be brought in at lower duty rates. The International Dairy Foods Association two weeks ago asked the USDA to increase the butter quota so that more foreign butter can be imported, thus lowering U.S. market prices.

The American Butter Institute, headquartered in Arlington, VA, represents the marketing, policy, and regulatory interests of the nation’s butter manufacturers. ABI’s 32 member companies market approximately 90% of all the butter manufactured in the U.S.

###