MD_DA410
DA
MD DA410 BUTTER - Northeast  

MADISON, WI. October 11, 2017 (Report 41)

Market participants are unclear as to why CME butter prices are lower 
than some would imagine at this point in the season. As such, some are 
identifying international markets in attempts to rationalize existing 
low domestic prices, others are not so sure. Butter manufacturers at 
some plants are microfixing bulk supplies as production progresses at   
a steady rate, with good demand. The market is primed for the holiday 
blitz, as butter stocks appear to be in great position for filling the   
upcoming holiday needs. This week, a cooperative export assistance 
program accepted requests for export assistance to sell 220,462 pounds 
(100 metric tons) of butter. The bulk butter price is 5 to 8 cents 
over the market of the CME Group, with various time frames and 
averages used. Tuesday's CME Group cash trading saw Grade AA butter 
close at $2.3250, down $0.0050 from a week ago. The undertone is mixed 
to unsettle as market indicators suggest a butter price that before 
long is likely to adjust higher. According to NASS, U.S. butter 
production for August 2017 totals 131.2 million pounds, up 6.2 percent 
from last year, but down 3.4 percent from July 2017. Cumulative 2017 
butter production through August totals 1.248 billion pounds, 0.7 
percent below the same period for 2016. August 2017 butter production 
in the Atlantic region totaled 10.1 million pounds, up 10.9 percent 
from last year, but down 26.1 percent from July 2017. According to the 
DMN National Retail Report-Dairy, for October 6-12, 2017, the 
Northeast weighted average retail price for 1-pound butter was $3.66, 
20 cents higher than the national price, but down 15 cents from last 
week's Northeast butter price. Retail butter markets reported prices 
ranging $2.99-$4.99 in the Northeast. The surveyed average price in 
the Southeast is $3.58, up 8 cents from last week. The Foreign 
Agricultural Service (FAS) reports August 2017 U.S. exports of butter 
and milkfat totaled 6.2 million pounds, a 182 percent increase from a 
year ago. 


2017 U.S. Butter and Milkfat Exports (USDA-FAS)

                 2017 Exports      % Change From 
                 (Million Lb.)       1 Year Ago

August                6.2             +182

TOTAL, JAN - AUG     39.6             + 16
 1 Canada            18.0             +180
 2 Mexico             5.2             - 72
 3 South Korea        3.1             +233
 4 Saudi Arabia       2.3             - 23
 5 Peru               1.9             +888


1100CT daniel.johnson@ams.usda.gov 608.422.8605
USDA/AMS/Dairy Market News, Madison, Wisconsin	
Dairy Market News website: http://www.ams.usda.gov/market-news/dairy
Dairy Market News database portal: 
http://www.marketnews.usda.gov/mnp/da-home