Butter Gains New Respect In Dairy Case Drop In Subsidies, Consumer Trends Help Butter Churn Up Strong Sales

Believe it. It’s butter. And it’s back.

Sales of U.S. butter are soaring, thanks to a big drop in government price supports for dairy products and a spate of bad publicity about margarine, say industry analysts.

“Consumers are rediscovering butter,” said James Miller, an Agriculture Department economist.

From 1992 to 1994, butter sales rose 17 percent. In the first two months of this year, they’ve shot up nearly 40 percent.

The government sets prices for dairy products and keeps them at that level by purchasing surplus. The prices were lowered beginning in the late 1980s, virtually wiping out government butter surpluses and boosting sales.

The result: Butter prices are at a 20-year low. Since 1988, the average retail price of butter has tumbled from $2.16 a pound to $1.60.

The price of margarine, meanwhile, rose from 73 cents to 82 cents a pound.

“Clearly last year was a major year for butter sales in terms of the price coming down,” said Jerry Kozak, executive director of the American Butter Institute. “We’re hoping to keep that price of butter down so we can stay competitive.”

Butter has suffered from a bad reputation because of the link between heart disease and saturated fat. A pound of butter has three times as much saturated fat as standard margarine.

But a series of recent studies suggested margarine, too, can increase the risk of heart disease. The culprit in margarine is its trans fatty acids, structurally altered fats that are produced when liquid oils are solidified.

Industry analysts say the margarine research has contributed to the increase in butter sales.

“I think there’s a heightened feeling among consumers that if they are simply more moderate in the way they approach all the foods they like … they can enjoy the taste of butter without having to compromise by eating margarine exclusively,” said Terry Nagle, a spokesman for Minnesota-based Land O’Lakes Inc., the nation’s largest butter producer.

Land O’Lakes’ butter sales were up 12 percent last year, he said.

Researchers have warned against switching to butter, saying margarine is still healthier.

“All the health authorities are urging people to consume less saturated fat. To be going back to butter, for whatever the reason, doesn’t make sense,” said Michael Jacobson, executive director of the Center for Science in the Public Interest, a private advocacy group on nutrition issues.