MD_DA431
DA
MD DA431 BUTTER - CENTRAL 

MADISON, WI. December 28, 2016 (Report 52)

The Central butter market is volatile. Some market participants 
equate that with limited bulk butter availability as some 
manufacturers indicated they are focusing on print production. In the 
Central region, bulk butter production is ongoing. Print butter 
production is variable, with some plant operators only focusing on 
bulk, while other plant operators are segmenting cream into bulk and 
print lines. One or two plants will be active only intermittently 
during the week. Some plant managers report receiving offers of spot 
cream loads priced at or below flat market prices. Although tempting 
from the price side of the equation, some managers indicate they are 
concerned about building inventories ahead of the end of the year. 
This time of year is typically a low point for butter sales for many 
operations, which means that butter churned now may stay in storage 
for months on a first in/first out inventory management program. 
However, if bulk butter is in short supply, demand could remain 
active. This week, a cooperative export assistance program accepted 
requests for 1.049 million pounds of butter. So far this year, the 
program has accepted assistance requests for 12.125 million pounds of 
butter. The NASS Cold Storage report noted U.S. butter stocks as of 
November 30, 2016 were 160.9 million pounds, up 21% from last year, 
but down 29% from last month. Bulk stocks in all warehouses were 
132.7 million pounds last year at this time.  DMN National Retail 
Report-Dairy for December 23-29 noted the national weighted average 
advertised price for a 1 pound package of butter is $2.60, $0.17 
below one week ago and $0.43 lower than one year ago. The weighted 
average prices in the Midwest and South Central regions are $2.56 and 
$2.57, respectively. Cream multiples vary, but range from just under 
market to 1.13 f.o.b. Timing of delivery and location affect pricing. 
Bulk butter prices reported ranged from 2 to 6 cents over the market, 
with various periods and averages used. Wednesday at the CME Group, 
Grade AA butter closed at $2.3100, up $.1050 from last Wednesday. 
1530CT Janet.Linder@ams.usda.gov 608.557-7003
USDA/AMS/Dairy Market News, Madison, Wisconsin
Dairy Market News website: www.ams.usda.gov/dairymarketnews
Dairy Market News database portal: http://www.marketnews.usda.gov/mnp/da-home