Stocks are now so low that people are jokingly offering to sell a half-eaten pack for £200.
And some French supermarkets – including in historic butter-producing areas like Brittany or Normandy – have had to put apologetic notes on empty butter fridges.
The shortage puts a huge question mark over the EU’s cornerstone the Common Agricultural Policy which was designed to PREVENT shortages and regulate production.
It stems back to a decision made back in 2015 when the EU abolished its system of milk quotas in 2015.
There was initially a flood of milk supplies which caused a collapse in global prices and prompted dairy farmers to slash output.
But butter consumption then rose worldwide amid reports that it was no longer seen as a health risk and was better than vegetable-oil alternatives like margarine.
Bakers, farmers and food producers have been warning of the growing problem for months but the crisis became political this week with newspapers warning of the worst shortages since the Second World War and the government seeking to reassure consumers.
Makers of French pastries such as croissants – in which butter often makes up around a quarter of the content – have warned of inevitable price rises.
Thierry Lucas, who has a bakery in the Finistère area, says he has already increased the prices of his croissants by five cents.
And Claude Francois, the owner of a small pastry producer in the central Cher region, has cut her workers’ hours by 70 per cent because she cannot source enough butter to maintain output.
She said: “We’ve been on rationed supplies since mid August.
“We are only receiving a tonne a week when we need three tonnes.
“We cannot go on like this for much longer.”
Falling levels of milk production, combined with a poor yield in 2016 and growing butter demand across the world, have resulted in a drop in supply and rising wholesale prices.
Global butter prices have almost tripled to £6,175 a ton from £2,205 in 2016, according to Agritel, an Paris-based farming consultancy. French consumers have not yet seen butter prices rise at the checkout because supermarket groups fix their prices once a year.
But this means butter suppliers can get higher margins elsewhere and consumers in the US, China and the Middle East are eat ever increasing amounts of butter and are lapping it up.
Thierry Roquefeuil, chairman of the milk-producers’ federation FNPL, said: “The issue is purely French and is related to the fact that there’s a price war raging between French retailers.
“French retailers refuse to increase prices, even by few cents, even for butter. Dairy producers see that there’s an outside demand at higher prices so they sell abroad, and rightfully so.
“Retailers have not adapted to the new market reality and have kept a cap on prices.
“For French dairy companies, it’s easier to export to countries such as Germany, where retailers are willing to pay a higher price.
“There’s an evolution of butter consumption. Demand is strong and the industry has to adapt to the new consumption.”
France’s Food Retailers’ Federation is underplaying the shortages as a temporary logistical problem linked in part to people panic-buying and hoarding butter.
But the crisis is creating a headache for Emmanuel Macron’s government as it tries to fulfil an election pledge to support farmers in their negotiations with companies to get a fair price for their produce.
Agriculture Minister Stephane Travert said he hoped a deal could soon be found between retailers and dairy producers.
He said: “I want to reassure all the consumers that soon butter will find its way back to shop shelves and consumers won’t be deprived of this French commodity that does honour to French tables and is the pride of French dairy production.”