Current Demand Dynamics and Cost Economics of Butter Oil

This blog provides detailed information about Butter Oil, including its classification, manufacturing process, industrial usage, price trends, and important players in the market.

Butter Oil: Definition

Butter oil is the fat concentrate derived primarily from butter or cream after the abstraction of essentially all the water and nonfat solids. Butter oil is known by various terms, such as “milk fat,” “anhydrous milk fat,” “dry butter fat,” and “dehydrated butter fat”. Butter oil must be cooled and crystallised carefully to form many fine crystals.

The anticipated outcome can be attained by quickly supercooling to 13–18°C while stimulating the mass during forced crystallisation, yielding a smooth homogeneous mass that does not separate into solid and liquid layers under normal conditions. Butter oil has an extended shelf life as compared to butter. The extensive use of butter oil in a variety of baked items and confectionery and its high demand in the food industry tends to impact butter oil prices. It is also used in croissants to make them puffy and in biscuits to make them soft.

Butter Oil Production Process

The centrifugation method is a constant and invariable process of producing high-quality butter oil. In this process, unsalted hard butter is cut into pieces and put in the butter melter, which is a perpendicularly covered stainless-steel tank equipped with an agitator. After this, the steam valve is opened, and the agitator begins to operate.

With the support of steam and hot water being passed via the oil separator, the water temperature in the tipping tank is regulated between 77 – 79oC. Later, the molten butter is permitted to enter the tipping tank and oil separator. To avoid the liquid from overflowing, the flow rate is adjusted appropriately. After that, the melted butter is split into oil and serum.

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Subsequently, the oil moves into the float-measured balance tank, and from there, it moves into the vacuum pan because of the suction. At this stage, it is boiled at 56-63oC in a 56-62 cm Hg vacuum. This helps in removing all the moisture from the oil. Finally, the vacuum is set free to allow the butter oil to flow with the help of gravity into the collecting vessel for subsequently cooling, packaging, and storing.

Industrial Uses of Butter Oil

Butter oil is primarily used to produce recombination milk, such as skimmed and instant milk powder. It is also commonly used for cooking, manufacturing ice cream and in the confectionery sector leading to a high demand for the product, affecting the butter oil price trends. In addition, butter oil is also utilised to manufacture several kinds of fat spreads.

Butter Oil Prices: Market Trend and Forecast

North America

Due to the rising feed costs, business blockages, and lack of labour in recent times, the United States dairy and its connected sectors faced difficulty maintaining a consistent supply. Because of the high prices of the feedstock, the price of butter oil also increased in the United States domestic market.

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Asia Pacific

In the Asia Pacific, the price of buttermilk continued to be strong because of the increasing prices of products on the back of the Russia-Ukraine war. The rise in the price was primarily due to trade blockages, restrictions on the supply side, and the weakening of inventories. Nevertheless, recently the prices started to become stable after they registered a minor decline. The price decline was due to the market's low demand amidst unusual inflation.

Europe

Massive instability was created in the European market due to the Russia-Ukraine war, which had a strong impact on the milk sector. There was a rise in the food and feed prices recently, which affected the butter oil price trends leading to a rise in the prices.

Key Industry Players

• Fonterra Co-operative Group
• Dairy Farmers of America Inc
• Hilmar Cheese Company, Inc
• Lactalis Group
• FrieslandCampina
• Westland Milk Products

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