MD_DA440                                                         
DA                                                               
MD DA440 BUTTER - WEST 

MADISON, WI.  September 7, 2016 (REPORT 36)

WEST BUTTER

Western butter production is steady. Domestic retail demand is firm and butter is moving 
well through contracts. Manufacturers are using available cream to focus on filling 
current print orders. Industry contacts say manufacturers have butter available to meet 
most buyer requests. With comfortable inventories, a few processors continue to sell 
cream in lieu of churning. Other processors have more committed inventories and are 
actively churning to assure meeting commitments for this fall. The DMN National Retail 
Report-Dairy for the week of September 2-8 found that the U.S. weighted average 
advertised price of 1 pound butter is $3.84, up $.84 from last week. The U.S. weighted 
average price was $2.95 one year ago. In the Southwest, the weighted average advertised 
price of 1 pound butter is $4.35, with a price range of $3.49-$5.49. In the Northwest, 
the weighted average advertised price of 1 pound butter is $3.70, with a price range of 
$2.88-$4.29. According to the NASS Dairy Products report, U.S. butter production during 
July 2016, 143.6 million pounds, was 6.0% higher than July 2015, but 5.1% lower than June 
2016. U.S. cumulative 2016 butter production through July is 1.173 billion pounds, 5.6% 
higher than the same period last year. In the West, total July butter production was 78.8 
million pounds, 14.0% higher than last year, but 0.6% lower than last month. California 
July production was 43.4 million pounds, 6.7% higher than last year, but 5.6% lower than 
last month. 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 
August 2016 monthly average price for AA butter, $2.1776, is down from the July monthly 
average of $2.2731, but up from the August 2015 monthly average of $2.1542. The Grade AA 
butter price at the CME Group on Wednesday closed at $2.0350, down $.0450 from a week 
ago.

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

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

July Total            2.8             - 44

TOTAL, JAN - JUL     31.9             -  9
 1 Mexico            17.7             +142
 2 Canada             5.4             + 36
 3 Saudi Arabia       2.8             - 78
 4 South Korea        0.9             - 67
 5 China              0.8             +522


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