MD_DA440  
DA 
MD DA440 BUTTER - WEST 

MADISON, WI.  September 23, 2015 (REPORT 38)

WEST BUTTER

A strong domestic demand for butter has helped make the market more 
resilient. Manufacturers report a wide range of production strategies at this 
time. Some butter makers are running full schedules to stay ahead of Q4 
demand. Others are working into their inventories and have slower production 
rates. Many butter makers report a drawdown of their butter inventories. 
Although there is more production emphasis on print than bulk butter as the 
Q4 holidays approach, a few manufacturers are seeing bursts of bulk butter 
sales activity. Cream supplies are generally adequate for butter 
manufacturing needs. Some contacts say they are selling occasional spot loads 
of cream in lieu of churning. The butter price at the CME Group has continued 
to climb since the beginning of August, when it was at $1.9900. Some industry 
contacts are questioning whether the current price levels accurately reflect 
demand. They are also speculating whether the strong prices will continue 
through the end of the year. The DMN National Retail Report - Dairy for the 
week of September 18 - 24, found that the U.S. weighted average advertised 
price of 1 pound butter is $3.40, up $.43 from one week ago but down $.02 
from one year ago. In the Southwest, the weighted average advertised price 
for 1 pound butter was $4.02 with a price range of $3.48 - $5.49, and in the 
Northwest, $3.57 with a price range of $2.99 - $3.99. The NASS Cold Storage 
report noted U.S. butter stocks as of August 31, 2015, were 209.3 million 
pounds, down 18% from last month. Butter stocks in all warehouses were 172.8 
million pounds last year at this time. Bulk butter pricing in the West this 
week is 4 cents under market to 3 cents above, based on the CME Group with 
various time frames and averages used. The Grade AA butter price at the CME 
Group on Wednesday closed at $3.0250, up $.4000 from a week ago. Last year at 
this time, the CME butter price was at $3.0600.

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