Butterfat gets its yellowish color from carotene, the fat-soluble vitamin A precursor that is also responsible for the color of carrots. Not all butterfat, however, is equally yellow. Some breeds of cows are more efficient than others at converting carotene to the colorless vitamin A.

If butter made from the milk of Holstein cows is much paler than that made from the milk of jersey or guernsey cows, then the facts above suggest that:

I believe, one of the tricks for GRE RC (and TC, SE as well) questions especially for inferences is the focus on keywords. Not just transition words but adjectives adverbs etc.
Here I think the key to this PA is the focus on "precursor" in " fat-soluble vitamin A precursor" indicating butterfat gets its yellow color from carotene, which is one step behind from converting into Vitamin A -thus it is yet to be converted to Vitamin A. Now contrast it with the fact that: "Not all butterfat, however, is equally yellow. Some breeds of cows are more efficient than others at converting carotene to the colorless vitamin A.". Thus a comparatively light yellow colored milk - would indicate some of this conversion from "precursor" Vitamin A to actual Vitamin A has happened.

(A) there is less butterfat in the milk of holsteins than in the milk of jerseys or guernseys
=> There is no correlation with quantity of butterfat.

(B) there is more vitamin A in the butterfat of holsteins than in the butterfat of jerseys or guernseys
=> Yes, makes sense (lets keep it)

(C) there is more carotene in the butterfat of holsteins than in the butterfat of jerseys or guernseys
=> there should be lesser carotene, as it should have been converted to fat-soluble Vitamin A

(D) holsteins are less efficient converters of carotene than are jerseys or guernseys
=> Opposite, if nothing, they should more efficient converters

(E) the carotene in the milk of holsteins is less fat-soluble than the carotene in the milk of jerseys or guernseys
=> This is going beyond the context of the argument, where in the option is discussing about the fat-solubility of carotene found in the milk of different breeds. We dont know its impacts on Vitamin A concentration or coloration