British households could face a butter and cream shortage this Christmas, it has been warned.
Peder Tuborgh, the boss of dairy firm Arla, blamed an increased consumer demand for butter for causing a “growing industry-wide shortage of milk fat across Europe”.
Mr Tuborgh said the boost in demand for butter had coincided with many dairy manufacturers putting more milk in cheese production because cheese yields better returns at a time of low milk prices.
However he insisted “there will still be butter available”.
A spokesman for Arla Foods said: “We can in general terms confirm that there is a clear upward development in industry prices on milk fat and consequently on butter and spreadable products on the European and global markets.
“We do expect the high demand for butter to continue throughout the year, potentially creating a shortage of butter products in parts of the European food and dairy industry.
He added that although European milk production is starting to increase again, the most optimistic forecasts show that total production in 2017 will “only be on par with the lower volumes produced in 2016”.
“Even though production is increasing, it is not expected to significantly change the imbalance in supply and demand in time to impact butter production for the holiday season,” he said.
However the National Farmers’ Union (NFU) rubbished the suggestion over a butter shortage, describing any such claim as “scaremongering”.
It told the BBC the “constant boom and bust dairy market cycle” helped “no one, most of all farmers”.
It said that while recent weeks had seen “record prices” for wholesale cream and butter, farm-gate prices had failed to keep up, adding that the “lack of strong upward movement in farm-gate milk price” was “extremely concerning”.
The union added: “That said, scaremongering about lack of milk supply going forward only serves to concern consumers.”