MD_DA440  
DA 
MD DA440 BUTTER - WEST 

MADISON, WI.  October 5, 2016 (REPORT 40)

WEST BUTTER

Western butter production is largely active as manufacturers continue to gear up for Q4 
butter needs. Butter makers are trying to take advantage of available and inexpensive 
cream. However, a few processors are holding back on churn rates in an effort to balance 
supply with demand. Inventories are still long. Manufacturers report domestic demand is 
coming in waves as market prices move lower. Many buyers are comfortable with the 
availability of butter and are buying as needed. The DMN National Retail Report-Dairy for 
the week of September 30-October 6 found that the U.S. weighted average advertised price 
of 1 pound butter is $3.38, up $.19 from last week. The U.S. weighted average price was 
$3.32 one year ago. In the Southwest, the weighted average advertised price of 1 pound 
butter is $3.91, with a price range of $3.49-$3.99. In the Northwest, the weighted 
average advertised price of 1 pound butter is $2.97, with a price range of $2.49-$3.49. 
According to the NASS Dairy Products report, U.S. butter production during August 2016, 
129.0 million pounds, was 0.7% higher than August 2015, but 10.4% lower than July 2016. 
U.S. cumulative 2016 butter production through August is 1.303 billion pounds, 5.1% 
higher than the same period last year. In the West, total August butter production was 
70.4 million pounds, 1.8% higher than last year, but 10.7% lower than last month. 
California August production was 38.2 million pounds, 6.4% lower than last year, and 
12.0% lower than last month. Bulk butter pricing in the West this week is 2 cents under 
market to 2 cents above, based on the CME Group with various time frames and averages 
used. The CME Group September 2016 monthly average price for AA butter, $1.9950, is down 
from the August monthly average of $2.1776. One year ago the CME Group monthly average 
was $2.6690. The Grade AA butter price at the CME Group on Wednesday closed at $1.8500, 
down $.0700 from a week ago.

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

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

August Total          2.2             - 59

TOTAL, JAN - AUG     34.1             - 16
 1 Mexico            18.2             +139
 2 Canada             6.4             + 44
 3 Saudi Arabia       3.0             - 82
 4 South Korea        0.9             - 66
 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