MD_DA440                                                         
DA                                                               
MD DA440 BUTTER - WEST 

MADISON, WI.  February 3, 2016 (REPORT 5)

WEST BUTTER

Western butter production continues to be active, using available cream supplies, but not 
seeking many additional loads of cream. A few manufacturers say they have shifted 
production from bulk to print butter in order to keep up with current retail demand. 
Industry contacts note the lack of export opportunities, heavy butter imports and large 
butter inventories should place a significant downward pressure on prices. So far, this 
scenario has not fully become reality. It seems buyers and sellers are currently ignoring 
these market indicators. Instead, the primary focus appears to be on meeting Q1 
commitments and assuring butter availability. The DMN National Retail Report-Dairy for 
the week of January 29-February 4 found that the U.S. weighted average advertised price 
of 1 pound butter is $2.92, down $.28 from last week, and down $.40 from one year ago. In 
the Southwest, the weighted average advertised price of 1 pound butter was $3.88. In the 
Northwest the weighted average advertised price of 1 pound butter was $3.72, with a price 
range of $2.99-$3.99. Dairy Products (NASS) reports U.S. butter production during 
December 2015, 177.1 million pounds, was 4.3% higher than December 2014, and 17.0% higher 
than November 2015. U.S. cumulative 2015 butter production through December is 1.849 
billion pounds, 0.4% lower than the same period last year. In the West, total December 
butter production was 86.4 million pounds, 11.7% higher than last year. California 
December production was 51.4 million pounds, 0.1% higher than last year. According to the 
California Department of Food and Agriculture, 2015 California butter production was 
580.6 million pounds, down 5.2% from a year ago. Bulk butter pricing in the West this 
week is 2 cents under market to 3 cents above, based on the CME Group with various time 
frames and averages used. The CME Group January 2016 monthly average price for AA butter, 
$2.1214, is down from the December monthly average of $2.3318, but up from the January 
2015 monthly average of $1.5714. The Grade AA butter price at the CME Group on Wednesday 
closed at $2.1600, down $.0400 from a week ago.

15300CT 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