Butter Surges to 16-Year High as U.S. Exports Cut Reserve

The 1,000 pounds (454 kilograms) of butter that Gerhard Michler uses every week to make cookies, cakes and petit fours at his San Francisco bakery is leaving the pastry chef with a case of ingredient indigestion.

While all his costs are up, including chocolate, none rose more than the butter used in everything Michler bakes at Creative International Pastries. Prices on the Chicago Mercantile Exchange jumped 81 percent in a year to $2.62 a pound, the highest since 1998, as surging U.S. exports eroded inventories and dairies failed to keep up with increased demand.