Colorado Springs shoppers browsing the freezer aisle this summer may find their favorite frozen treats more affordable than they have been in recent years, as a broad easing in dairy commodity costs filters down to grocery store shelves.
Bureau of Labor Statistics figures show that last month's average retail price for a half-gallon container of ice cream nationally came in under $6, even amid peak summer demand — a notable shift from the roughly $6.26 per container that shoppers had paid on average over the previous two years.
The main force pulling prices lower is the cost of butter, which fell close to 9% compared with the same period a year earlier according to the Consumer Price Index, while other key ingredients such as milk and sugar posted modest increases over the same period.
Butter hit $3.50 per pound in 2023, a level not seen since 1965, but has since retreated all the way to $1.65 per pound, leaving it roughly 31% beneath its five-year average. Because fresh cream — the ingredient that supplies ice cream's butterfat — ranks as the costliest component in production, that commodity swing has had an outsized effect on finished-product prices.
Advances in selective breeding and modernized dairy production methods have expanded the nation's butterfat supply and pushed wholesale costs down; the International Dairy Foods Association reports that more than $11 billion has flowed into upgraded manufacturing across the U.S. dairy sector, allowing producers to generate milk with greater efficiency. Phil Plourd, an executive at the Wisconsin Dairy Products Association and an advisor to agricultural data firm Ever.Ag, told CNN that "dairy farmers using genetics and feeding for breeding for fat" have driven "the average percentage of fat in 100 pounds of milk" substantially higher over the past five to seven years.
That shift matters directly to manufacturers because federal rules set a minimum of 10% milkfat by weight for any product sold under the "ice cream" label. Industry leaders also see a marketing opportunity in higher-fat formulations, with the IDFA's president noting that elevated butterfat levels deepen flavor — and an IDFA and Morning Consult survey found that nine in ten respondents ranked flavor as their top priority when choosing ice cream, placing it ahead of both price and package size.
Some national retailers including Whole Foods and Target are running summer promotions on ice cream, and grocery price-tracking service CartHappy noted that Walmart adjusted the prices on its Great Value half-gallon line more than a thousand times in a two-week span across just seven flavors.
The current relief may not last through year's end: Ever.Ag projects that wholesale butter will tick back up to roughly $1.70 per pound as holiday baking picks up and overseas buyers maintain strong demand.
Whether that anticipated price recovery materializes on schedule — and how quickly it would reach grocery shelves — remains to be seen in the months ahead.