Butter is melting: prices for a number of products have fallen to a two-year low
Retailers are delighting Russians with cheap butter and a part of the grocery basket before the New Year, departments are noting an increase in production, and the Ministry of Agriculture is optimistic. Experts are arguing: is this a temporary correction or potential difficulties for farmers with the risk of recession in 2026? Insiders and market observers admit that at the beginning of next year, the most likely scenario is a moderate stabilization or a slight decrease in butter prices within 3-5% of the current level. And what about the rest of the items in the grocery basket, see the Izvestia article.
Oil down
The increase in production and oversupply reversed the dynamics of butter prices, lowering them below last year's levels for the first time in a year. The Rusprodsoyuz Association fixes an average retail price of 1,178.8 rubles per kg, which is 0.5% lower than December 2024. According to Dmitry Leonov, Deputy chairman of the association's board, the increase in raw milk production (+3.5% year-on-year) and the expansion of butter supply (+2.9% year-on-year) contribute to lower prices.
— In January – October, the volume of butter production amounted to almost 285 thousand tons, which is 2.6% more than in the same period last year, — the press service of the Ministry of Agriculture reported. — Production growth contributes to maintaining a stable price situation in this segment. So, at present, the producer price for butter remains approximately at the level of last year. Retail oil prices have decreased by 0.7% over the past month, and by 1.1% year–on-year.
In addition, according to the FAS press service, in mid-December, the average mark—up in 10 federal retail chains for "first price" butter was 1.3%, and for the entire basket of socially important "first price" food products - 4.7%.
Pressure on the chain: from farms to shelves
The decline in prices is rapidly being transferred from wholesale to retail, where the margins on "first price" butter in federal chains amounted to only 1.3%.
A drop in prices below last year's mark is an important psychological milestone and a signal for the market, says Vener Ilyasov, a representative of the food market and chairman of the Council of the Bashpotrebsoyuz.
— The fundamental reasons are the growth of raw milk production and the expansion of the finished product supply. This allows us to hope for greater stability, although it is too early to talk about a stable trend," the expert points out.
In turn, Chairman of the ACORT Presidium Stanislav Bogdanov notes that retail prices for butter have been decreasing continuously since mid-September. According to ACORT monitoring data, by mid—December, the minimum retail price for butter in retail chains decreased by 24% year-on-year to 748 rubles per kilogram. The purchase price has fallen by 12% over the year, to 755 rubles, which means that at the moment, retailers sell basic butter items at a negative margin.
Processors suffer from high energy and logistics costs, while farmers risk demotivation due to pressure on milk purchase prices. Consumer cooperatives absorb the impact through long-term contracts. Rashat Shaimardanov, Chairman of the Board of Tatpotrebsoyuz, points out that the pressure on retail is beginning to be transmitted down the chain to the manufacturer.
"Our task is to use cooperative mechanisms to absorb this impact, ensuring stable sales to our farmers under long—term contracts and preventing their demotivation," Bogdanov emphasizes.
Shortage of demand and import factor
According to the consolidated data of analytical agencies, oil consumption decreased by 9% at the beginning of the year, citizens switched to alternatives, and tariff privileges opened imports from India and Iran to 25 thousand tons duty—free. Stocks in warehouses exceeded last year's levels by half, reinforcing the correction after the peak of the end of 2024.
The decrease in butter prices is at odds with the overall food inflation of 11% in 10 months: vegetables have increased by 30%, but the "milk" is stabilizing.
— The dynamics of butter prices at the end of 2025 is radically at odds with the general trend of food inflation. In the first ten months of 2025, food prices as a whole rose by more than 11%, while annual inflation reached 6.65% in November," said Vladimir Poklad, Director of the Management Consulting Department at the Business Profile Group.
Experts see this not as deflation, but as a post-stress equalization.
"The decrease in butter prices at the end of 2025 below the level of last year is not a short—term promotional correction, but the result of a leveling off of market factors after a period of price tension," says Elena Tikhonova, Managing partner of FoodTech Consulting.
According to her, retail chains are faster transferring the reduction of purchase prices "to the shelf", using oil as a sensitive category to retain customer traffic. At the same time, processors find themselves in the most vulnerable position: the decrease in selling prices occurs against the background of still high cost of energy, packaging, logistics and credit resources. Under such conditions, the market is entering a phase of operational optimization: volume growth, reduction of SKUs (inventory accounting units), strengthening of promotional mechanics and the search for export or contract sales channels.
Deflation in the basket: eggs, vegetables, cereals
According to the official market survey, eggs fell in price by 17.7–22%, potatoes — by 24-27%, tangerines — by 15-25%, sugar and cereals — by 3-5%, tomatoes — by 16%. Of the 25 basic products, 16 have fallen in price over the year.
According to Stanislav Bogdanov, in addition to butter, rice (-41%), white cabbage (-38%), potatoes (-30%), butter (-24%), onions (-23%), salt (-23%), beets (-21%) have fallen in price in retail chains over the past 12 months., carrots (-21%), chicken eggs (-17%), granulated sugar (-14%), wheat flour (-13%), beef (-12%), noodles (-7%), lamb (-7%), millet (-1%), rye bread (-0.1%).
The main reason for the volatility in the market of marketable eggs is the discrepancy between the maximum volumes of supply and demand. As a result, during the active production season, poultry farmers often suffer losses and are forced to sell products at a minimum price, often below cost, Rusprodsoyuz notes.
A good harvest and vegetable stocks, and meat growth are key drivers of availability for the New Year.
Analysts at ECC InvestProekt LLC add that prices for other products, excluding seasonal fluctuations, are mostly rising, we saw the largest surge in prices in late 2024 and early 2025, followed by a slight decrease.
— Egg prices in early December 2025 actually decreased by 22% compared to January 2025 and averaged 93 rubles. However, egg prices have a pronounced seasonality: they are usually cheaper in the summer months and more expensive from October to April. The peak price usually falls in December-January, less often in March-April. At the same time, for example, sour cream has shown an increase in prices during the year, and we do not expect a significant decrease," the experts of InvestProject said.
Forecasts for 2026: stabilization with risks
A number of analysts expect stagnation or decrease in oil prices in the range of 3-5%, without sudden jumps in the absence of shocks. Eggs will stabilize, potatoes and tangerines will grow by 10-40% due to seasonality, buckwheat — by 5-8%.
High inventories and weakened demand will support the trend, but inflation, logistics and household incomes will set the band.
— At the beginning of the year, there is a high probability of a continuation of the trend towards lower prices in retail and stagnation of prices in wholesale against the background of high inventories, — predicts Dmitry Rylko, CEO of IKAR.
Taking into account the analysis of historical data and current market trends, the forecast for the beginning of 2026 is inclined towards relative stability of butter prices. A sharp rise in price or a significant reduction in the price of the product is not expected, and price fluctuations are likely to remain within the seasonal norm, within ± 3-5% of the level of the end of 2025, analysts of the Cenosaurus service predict.
Senior Researcher at the Center for Agri-Food Policy at the Institute of Applied Economic Research (IPEI) Denis Ternovsky of the Presidential Academy notes that today, on the contrary, the rise in butter prices is a global trend associated with an increase in the consumption of animal fats. According to him, the market is now trying to find a balance between the increased prices and the restrained demand.
— Most likely, he will try to reach the "shelf" of relatively stable prices, as it was in 2017-2023, but it will already be higher. At the same time, price dynamics will largely depend on the dynamics of household incomes: with their stagnation, oil is one of the first candidates for reducing costs and, consequently, demand and real prices," said Ternovsky.
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