Butter prices in the U.S. jumped to their highest levels in over a year, with dairy prices also rebounding globally—underscoring broader concerns about food inflation among consumers.
U.S. butter prices rose to about $4.80 per pound in June 2025, according to the latest data cited by the St. Louis Fed, up nearly 4% from June 2024—putting prices at their highest since early 2023.
Tighter global milk supplies and rising input costs, including labor and packaging, are key drivers of the surge, the Financial Times reported Sunday, with the UN Food and Agriculture Organization’s butter price index at an all-time high.
The Financial Times reported that butter futures on international markets have climbed sharply in recent weeks, reflecting similar supply-demand imbalances in the EU, U.S., New Zealand, Argentina and Australia.
While the recent surge in U.S. butter prices reflects domestic inflation pressures, it’s also closely tied to developments overseas. A tightening in global milk supply—driven by poor weather conditions, herd reductions and rising production costs—has led to higher international butter prices, Bloomberg reported in July. According to the Food and Agriculture Organization of the United Nations, dairy output from major exporters like New Zealand and parts of Europe—which together comprises around 70% of the butter exported around the world—began 2025 with historically low stockpiles that caused prices to spike. Bloomberg reported that New Zealand’s butter prices rose 46.5% through June to about $5.10 per pound. Although the U.S. produces most of its own butter, international price benchmarks influence domestic wholesale and retail pricing. Increased input costs also affect the prices of butter in the U.S., Europe and New Zealand, especially ahead of high-consumption seasons.
A Reuters/Ipsos survey of over 4,000 adults in April found that nearly 90% of Americans are concerned about rising inflation, with just 32% of Americans approving President Donald Trump’s handling of inflation. The overall Consumer Price Index—the most widely cited inflation metric—has been as low as 2.3% this year, nearly in line with the Federal Reserve’s long-term 2% goal for inflation. That’s significantly below the more than 9% inflation rate reached in June 2022, but Americans’ concerns have persisted as economists have warned Trump’s tariffs will lead to higher consumer prices. Inflation has ticked up slightly in recent months, reaching 2.7% in June, the second month in a row of increases after the 2.3% rate was recorded in April. According to the Consumer Price Index, food-at-home inflation has remained elevated—the St. Louis Fed shows an increase in butter prices beginning in April.
The Bureau of Labor Statistics will release July’s CPI on Tuesday, which is reportedly expected to reflect rising inflation. Business Insider reported Monday that this week’s report is likely to show more tariff pressure on prices, with Trump’s efforts likely to reflect price increases for consumers—an expected 0.2% increase from last month and 2.8% year-over-year.
The Financial Times reported an increase in dairy commodity prices, with butter futures in Europe rising in tandem with tighter global milk output. New Zealand’s lower-than-expected milk production and Europe’s heatwave-related farm disruptions are reportedly key contributors to a tighter global supply picture. Demand from food manufacturers in China and Southeast Asia has remained strong, putting further pressure on export markets. The international rebound has driven up wholesale prices, which are now being passed down the supply chain to U.S. retailers and consumers.