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CONSUMERS ARE BUTTERING UP DESPITE ALTERNATIVE SPREADS

WASHINGTON -- Consumer demand for butter is increasing despite the fact that competing spreads are more prominently displayed in dairy departments, according to Jim Miller, an agricultural economist with the Department of Agriculture's Economic Research Service. Miller said spreads have about five times as many facings as butter in the average dairy aisle. "The average supermarket has two rows of

WASHINGTON -- Consumer demand for butter is increasing despite the fact that competing spreads are more prominently displayed in dairy departments, according to Jim Miller, an agricultural economist with the Department of Agriculture's Economic Research Service. Miller said spreads have about five times as many facings as butter in the average dairy aisle. "The average supermarket has two rows of butter and 10 rows of other spreads." This is a situation that will clearly change, Miller said.

"I think with the decline in consumption of margarine, the number of facings will decrease," he said. "The consensus is that margarine has basically been declining for the last 15 years.

"I suspect retailers may have responded to that by cutting facings for margarine."

"There is still much more margarine sold than butter," he said. "The gap has narrowed but it hasn't changed completely."

Miller also helped to debunk a recent report on rising butter sales.

The report, which had appeared in The New York Times, stated that sales of butter were up an impressive 40%. USDA officials told SN that only a fraction of that represents retail sales, however.

"[That figure] includes a large quantity of commercial export," agreed Miller . "What consumers are buying is nowhere near close to a 40% increase."

The National Dairy Board, however, said butter sales are up 10% over last year, attributable to a combination of reduced Government price supports for dairy products and bad publicity about competing spreads.

"There are so many dynamics in this particular market that it is very hard to figure out which factor is responsible," said Charlie Garrison, spokesperson for the National Dairy Board. "The price is down substantially, so it is more competitive with other spreads."

Miller of USDA acknowledged that "we are seeing a sharp increase in sales, but it's mainly a delayed response to big reductions in price.

"The retail price range for butter is now overlapping the retail price for margarine. Consumers clearly have responded to the much lower prices," he said.

Miller added that especially strong post-Christmas and post-Easter reorders may also have contributed to the gains.

TAGS: Dairy