MD_DA440                                                         
DA                                                               
MD DA440 BUTTER - WEST 

MADISON, WI.  March 23, 2016 (REPORT 12)

Western butter production is active and steady. Cream supplies are plentiful, but butter 
makers are being selective on purchasing any additional loads of cream. Many of the 
manufacturers are now focusing on bulk butter production. With the passing of the early 
spring holidays, seasonal butter requests are starting to wane. The remaining customary 
demand is steady and good, but unable to keep up with production. Inventories are 
building. End users are using different strategies to achieve some price coverage for 
late 2016 butter needs. In some cases, buyers are taking physical possession of butter, 
while others are using the futures market to gain price protection. The DMN National 
Retail Report-Dairy for the week of March 18-24 found that the U.S. weighted average 
advertised price of 1 pound butter is $3.07, down $.36 from last week. In the Southwest, 
the weighted average advertised price of 1 pound butter is $2.99. In the Northwest the 
weighted average advertised price of 1 pound butter is $3.50. The NASS Cold Storage 
report noted U.S. butter stocks as of February 29, 2016, were 235.5 million pounds, up 
23% from last month. Butter stocks in all warehouses were 179.0 million pounds last year 
at this time. Bulk butter pricing in the West this week is 5 cents under market to 2 
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 $1.9200, down $.0200 from a week 
ago.

       2016 U.S. Butter Imports (USDA-FAS)

                 2016 Imports      % Change From      % of
                 (Million Lb.)       1 Year Ago       Yearly Quota


February Quota          1.2          -  23.4           7.5

TOTAL, JAN - FEB
    High Tier            7.1          + 266.9           ...
    Quota                2.7          -  13.5          17.6


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