Source: POLITICO'S MORNING AGRICULTURE, 12/4/17

 Wall Street was not raving about mortgages or tech startups on Friday. Following the spirit of our butter-loving French friends who are grappling with their own butter battles, analysts at a conference sponsored by Rabobank sang butter's praises as a food of the future. 

Simplicity in vogue: Consumers have shifted away from margarine and back to butter because its ingredient list is shorter, and the new conventional wisdom says it appears to be healthier. "When you're looking for clean label, you get butter and salt," said Rabobank senior analyst Thomas Bailey. "A simple label is going to dominate and people want butter."

This isn't a passing infatuation: Analysts predicted it may take 20 years before margarine comes back in vogue again. There was even talk that Americans could return to their early 20th century annual butter consumption habits. (Bailey said that in 1905, Americans consumed an average of 18 pounds a year and now consume six pounds a year).

Timing butter's comeback: Since the 2015 crash in dairy prices, Europe has been trying to figure out how to get rid of its excess dairy capacity. Once Europe figures that out, the market for dairy will pick up again, and the United States is poised to be one of the few countries to step in, Bailey said. 

"We're one of the few markets that has the land and infrastructure to continue and grow production," he said. "We've got a down cycle in pricing we have to get through, and then we're going to see an upside."

He stressed that butter was a bright spot in an industry that was struggling to find a place for excess whey. But food companies are finding far more outlets for whey besides animal feed. "We're jamming whey into everything from yogurts to cereal bars. Yoga moms are consuming even more of this stuff," said Bailey.

Animal protein's outlook: The conference wasn't all focused on dairy. Don Close, Rabobank senior analyst for animal protein, was generally optimistic about the future of e-commerce for his sector.

He also warned that the proliferation of businesses like meal kits would present challenges to the sector, which has long catered to mass production. "If we go to all of these niche products, it's going to force them to have lots of starts and stops," warned Close. "It's just such a diversion from our existing business model."