MD_DA440 DA MD DA440 BUTTER - WEST MADISON, WI. AUGUST 19, 2015 (REPORT 33) WEST BUTTER The high demand for cream continues to motivate some western butter makers to sell their cream supplies in lieu of churning. In some cases, butter production has shifted from bulk to print. In other instances, processors are actively churning to help build inventories in advance of the typical seasonal increase in Q4 butter demand. Inventories are mixed depending on the production strategy taken, but are generally comfortable. Manufacturers are reporting relatively strong consumer demand for butter. Trading has been active and pushing prices higher at the CME Group. There is a large gap between domestic pricing and international markets. Industry contacts are suggesting that these pricing mechanisms are out of balance and will converge at some point. Bulk butter pricing remains at 4 cents under market to 5.5 cents over, based on the CME Group with various time frames and averages used. The DMN National Retail Report - Dairy for the week of August 14-20, found that the U.S. weighted average advertised price of 1 pound butter is $3.11, up $.15 from both one week but down $.25 from one year ago. In the Northwest, the weighted average advertised price for 1 pound butter was $3.29 with a price range of $2.49 - $3.99. (There were no reported advertised prices for the Southwest this week.) Trading has been active and pushing prices higher at the CME Group. The Grade AA butter price at the CME Group on Wednesday closed at $2.2700, up $.2550 from a week ago. 2015 U.S. Butter Imports (USDA-FAS) (Million Lb.) % Change From % of 1 Year Ago Yearly Quota July Quota Imports 0.7 - 65 4 Jan. - July High Tier 9.2 +1612 N.A. Quota Imports 11.2 + 12 73 1530CT Mike.Bandli@ams.usda.gov 608.557.7010 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