Hogwarts Butter School

Harry arrives at Hogwarts to start his first year of magical education. However, during the welcoming speech, the Headmaster announces that Hogwarts will now be a Butter School. Just what exactly does he mean? Is he truly mad, like Ron's brothers always told him? Or is it all an act of the greatest wizard alive? And if it is an act, just what exactly is the Headmaster planning?