Norway’s butter shortage

December 14, 2011

I’m going to illustrate a kind of reverse alchemy, in which I take humor and transform it into economics.  Not everyone’s taste, I suppose, but that’s what we do.

Norway, it turns out, has a butter shortage, with prices shooting up just as the holidays hit.  Behind this lies some economics:

  • Norway, a beautiful country of 5m people filled with mountains, glaciers, and fjords, has a policy of producing its own dairy products.  Imports from nearby Sweden and Denmark are tightly controlled, even prohibited.  It’s as if New York decided not to allow milk and butter from Pennsylvania.
  • Since Norway isn’t an ideal place to produce dairy products, this involves massive subsidies to Norwegian farmers, who are said to be a happy lot.
  • A shortage has developed, apparently the result of holiday baking and the popularity of a low-carb diet.  Prices have shot up, and stores are limiting purchases.
  • A Russian was said to be “detained” for trying to smuggle in some Swedish butter.  (There’s some Norwegian-Swedish history here that only a Norwegian could explain to you.)
  • As usual, Stephen Colbert had the best line:  “The Norwegian butter shortage is the worst international food crisis since they devalued the chocolate euro.”
Thanks to Stan Zin for the idea, and our collection of Norwegian friends for their support and entertainment value.

Links

http://www.cnn.com/2011/12/13/world/europe/norway-butter-shortage/
http://www.colbertnation.com/the-colbert-report-videos/404098/december-12-2011/norway-s-butter-shortage

Posted by Dave Backus

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