MD_DA440                                                         
DA                                                               
MD DA440 BUTTER - WEST 

MADISON, WI.  April 6, 2016 (REPORT 14)

WEST BUTTER

Western butter makers say although production remains active, they have slowed the churns 
slightly since several of the big spring holidays have passed. Much of the production 
focus is now on making bulk butter. Cream is readily available for butter making, but 
processors are hesitant to buy extra loads of cream. Manufacturers are trying to manage 
the volumes of butter moving into inventories. Butter stocks are building none the less. 
Retail demand continues to be strong. Some retail private label customers are actively 
seeking out extra loads of bulk butter in an effort to assure coverage for needs later in 
the year. In addition, some industry contacts say a few new end users, who once used 
hydrogenated vegetable oils, are requesting butter instead. The DMN National Retail 
Report-Dairy for the week of April 1-7 found that the U.S. weighted average advertised 
price of 1 pound butter is $2.96, up $.26 from last week. The U.S. weighted average price 
was $2.46 one year ago. 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 $2.74. According to the NASS Dairy Products report, U.S. butter production 
during February 2016 (unadjusted for the extra production day in February 2016), 171.2 
million pounds, was 9.6% higher than February 2015, but 2.5% lower than January 2016. 
U.S. cumulative 2016 butter production through February is 346.9 million pounds, 3.3% 
higher than the same period last year. In the West, total February butter production was 
82.7 million pounds, 13.6% higher than last year. According to the California Department 
of Food and Agriculture, February 2016 butter production was 51.0 million pounds, up 0.2% 
from a year ago. California year-to-date butter production through February is 103.8 
million pounds, down 4.2% from 2015 butter production through February. Bulk butter 
pricing in the West this week is 3 cents under market to 2 cents above, based on the CME 
Group with various time frames and averages used. The CME Group March 2016 monthly 
average price for AA butter, $1.9605, is down from the February monthly average of 
$2.0840, but up from the March 2015 monthly average of $1.7166. The Grade AA butter price 
at the CME Group on Wednesday closed at $2.0800, up $.1250 from a week ago.

2016 U.S. Butter and Milkfat Exports (USDA-FAS)

                 2016 Exports      % Change From 
                 (Million Lb.)       1 Year Ago

February Total        9.0             + 61

TOTAL, JAN - FEB     14.7             + 31
 1 Mexico            11.1             +190
 2 Canada             1.2             + 60
 3 Saudi Arabia       1.1             - 70
 4 South Korea        0.2             - 34
 5 Taiwan             0.1             - 15


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