MD_DA440 DA MD DA440 BUTTER - WEST MADISON, WI. August 9, 2017 (REPORT 32) Western butter makers are not having any particular trouble getting the cream needed for butter production. However, some processors are hesitant to take on any extra cream unless needed to fulfill a confirmed sale. With higher values of butterfat, the manufacturers do not want to put those pricy milkfats into storage as bulk butter. A number of butter makers are choosing to sell off the cream rather than churn. Although inventories are a little heavy, they are being drawn down by current demand. Domestic butter demand is strong as buyers seek to gain coverage ahead of the late year butter needs. A few manufacturers are finding export opportunities in light of some very strong international butter prices. Bulk butter pricing in the West this week is 2 cents below to 5 cents above, based on the CME Group with various time frames and averages used. The DMN National Retail Report-Dairy for the week of August 4-10 found that the U.S. weighted average advertised price of 1 pound butter is $3.57, up $.08 from last week. The U.S. weighted average price was $2.99 one year ago. In the Southwest, the weighted average advertised price of 1 pound butter is $3.52, with a range of $2.99-$3.99. In the Northwest, the weighted average advertised price of 1 pound butter is $3.86, with a range of $3.79-$3.99. According to the NASS Dairy Products report, U.S. butter production during June 2017, 140.6 million pounds, was 4.8 percent lower than June 2016, and 14.0 percent lower than May 2017. U.S. cumulative 2017 butter production through May is 981.6 million pounds, 1.7 percent lower than the same period last year. In the West, total June butter production was 68.8 million pounds, 10.0 percent lower than June 2016 and 6.8 percent lower than May 2017. California June production was 40.5 million pounds, 12.0 percent lower than last year and 11.6 percent lower than last month. The CME Group July 2017 monthly average price for AA butter, $2.6195, is up from the June monthly average of $2.5688. One year ago the CME Group monthly average was $2.2731. The Grade AA butter price at the CME Group on Wednesday closed at $2.6500, down $.0600 from a week ago. 2017 U.S. Butter and Milkfat Exports (USDA-FAS) 2017 Exports % Change From (Million Lb.) 1 Year Ago June 8.2 +257 TOTAL, JAN - JUN 28.2 - 3 1 Canada 14.0 +219 2 Mexico 3.5 - 80 3 South Korea 2.1 +234 4 Saudi Arabia 1.8 - 29 5 Peru 1.3 +614 2017 U.S. Butter and Milkfat Imports (USDA-FAS) (Imports for Consumption) 2017 Imports % Change From (Million Lb.) Last Month June Imports Total Butter, Fats, Milk (H.S. Code 0405) 6.3 - 8 Butter Quota (H.S. Code 405101000) 0.7 + 75 Over Quota (H.S. Code 405102000) 4.1 - 9 AMF Quota (H.S. Code 405901020) 0.3 - 47 Over Quota (H.S. Code 405902020) 1.1 + 5 Other Milk Fat 0.1 - 65 2017 Imports % Change From (Million Lb.) 1 Year Ago TOTAL, JAN - JUN 37.9 - 33 1 Ireland 19.0 + 28 2 Mexico 6.4 - 58 3 New Zealand 4.5 - 67 4 Chile 2.7 + 77 5 France 1.7 - 16 1530CT mike.bandli@ams.usda.gov 608.422.8592 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