Japan has so far escaped the shortages of rice besetting other countries. But it's running short of a food product the Japanese once disparagingly associated with foreigners — butter.

Japan's Agriculture Ministry is ordering the country's four major dairy producers to churn out more butter because the product is disappearing fast from store shelves as a result of a fall in milk supplies and higher demand from consumers, who are eating more bread these days.

A government official said increased domestic production is more attractive than stepped up imports because foreign butter has become more expensive.

A drought in Australia is driving up the cost of cattle feed and demand for butter also has risen elsewhere in Asia.

The butter shortage is somewhat ironic for Japan, where Westerners centuries ago were told they "smelled of butter."

Today, Japanese households consume a total of about 12,500 tonnes of butter a year, and more is used by bakeries and other businesses.

The Agriculture Ministry told Meiji Dairies Corp., Snow Brand Milk Products Co., Yotsuba Inc. and Morinaga Milk Industry Co. to release inventory and increase production by as much as 20 per cent above their monthly average.

Shops are running short of butter because production hasn't kept up with demand. That is partly because dairy farmers on Japan's northern Hokkaido Island have cut raw milk output amid flagging consumption of milk in recent years.

At the same time, dairy producers have allocated a larger proportion of their raw milk to cream and milk-based drinks, which often make bigger profits than butter.

The official, Tsuyoshi Hashimoto, said the butter scarcity might have escalated because consumers overreacted and rushed to grocery stores to stock up.

Officials also hope demand will ease when a butter price hike of eight per cent to 10 per cent takes effect this month.

"The bottom line is, however, butter is not our staple food," Hashimoto said. "Personally, I can happily switch to margarine."