Aloha Gary I make my own ghee and have never had it last long enough to be concerned...yet I know any fat would go rancid eventually and have the distinct odor that goes along with that. Commercial ghee is usually good for 6 months, yet the house temperature would make a difference I am sure. Here in Hawaii things just don't last as long on the counter (even our coconut oil is liquid at room temperature!) So use your nose and never eat anything rancid!
This seems like a good article on butter http://www.webexhibits.org/butter/off.html Butter contains butyrate which is one of the same smelly substances in body odor and vomit. When butter goes rancid it is normally through hydrolosis. The butyrate is separated and you should be able to taste/smell it. There are plenty of stories of indigenous cultures eating "rancid" butter, so even at this point it may not be unhealthy.
Ghee, being pure oil, shouldn't be undergoing the hydrolysis, but instead should be undergoing mostly oxidation. Butyric acid is still liberated in this process. www.biochemj.org/bj/044/0561/0440561.pdf
So I think rancid ghee should smell bad also.
I keep mine sealed and in the refrigerator where it is cold and dark and am not worried about it going bad there any time soon.
In (hot) India ghee is not refrigerated, but the turnover is usually quick.
I use 1/2 teaspoon of ghee every day. I go through a jar of it every couple of months, and I keep it on my kitchen counter. It's never gone rancid. And so I would suggest if you go through ghee fairly quickly there is no need for refrigeration at all. But if you are only an occasional ghee user then stick in the fridge.
I just called a company that makes Ghee and the very nice lady who answered the phone said that it does NOT go bad. She said to keep it refrigerated and dry (don't put a wet spoon in the jar) and it will be fine for up to 3 years.
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