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Holiday Baking Could Get Pricier as Butter Climbs to Record

  • California heat wave weighs on cow’s milk production
  • Rising spot butter prices signal higher consumer costs ahead


Photographer: Taylor Glascock/Bloomberg

Butter prices have soared to a record -- further adding to escalating food costs as grocery chains start ramping up orders ahead of the holiday baking season.

Spot butter rose to a record $3.17 per pound Friday. The culprit, according to one dairy market expert, is high temperatures in California, the leading US dairy state. Hot weather makes it difficult for cows to produce milk, and lingering drought has also reduced the availability of animal feed, according to Nate Donnay, director of dairy market insight at StoneX Group Inc.