MD_DA440                                                         
DA                                                               
MD DA440 BUTTER - WEST 

MADISON, WI.  August 3, 2016 (REPORT 31)

WEST BUTTER

Western butter production continues to be in a steady pattern. Some manufacturers are 
transitioning more production time into print versus bulk butter. Other manufacturers are 
slowing their churn rates to keep inventories in check. Cream is generally available for 
most processing needs. Industry contacts say domestic butter demand is good with a lot of 
interest coming from retailers. Contacts also note a cat and mouse game going on with the 
price of butter. Fluctuations in the butter price can spur on or suppress buyer interest 
rather quickly. Buyers have a fair amount of pent-up demand as they want to assure Q4 
coverage of their butter needs, but they are also wanting to get favorable pricing from 
manufacturers. Both sides will be closely watching the availability of butterfat over the 
next few months and how that will play into butter markets. A number of market 
participants see this as the quiet time before baking season moves into top gear. The DMN 
National Retail Report-Dairy for the week of July 29-August 4 found that the U.S. 
weighted average advertised price of 1 pound butter is $3.21, up $.14 from last week. The 
U.S. weighted average price is down $.15 from $3.36 one year ago. In the Southwest, the 
weighted average advertised price of 1 pound butter is $3.99. In the Northwest, the 
weighted average advertised price of 1 pound butter is $2.99. According to the California 
Department of Food and Agriculture, June 2016 butter production was 46.0 million pounds, 
up 2.5% from a year ago. California year-to-date butter production through June is 306.4 
million pounds, down 4.8% from 2015 butter production through June. Bulk butter pricing 
in the West this week is 1 cent under market to 3 cents above, based on the CME Group 
with various time frames and averages used. The CME Group July 2016 monthly average price 
for AA butter, $2.2731, is up from the June monthly average of $2.2640 and up from the 
July 2015 monthly average of $1.9056. The Grade AA butter price at the CME Group on 
Wednesday closed at $2.2225, unchanged 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