Eating rancid butter can cause stomach illnesses and drive a person's stores of Vitamins B and E out of the body, according to the New York Times. Rancidity happens when oils or fats spoil, and any food that contains these ingredients is susceptible, including margarine, cooking oils, seeds and nuts.
The first sign of rancidity is a change in odor. If the butter has a bitter or sharp smell when the container is opened, it can be rancid. Light speeds up the spoilage process, which is why butter and margarine come in opaque containers, explains the New York Times. To maximize the butter's shelf life, keep it refrigerated, and close the lid or wrap the sticks securely after each use.