NorthEast Butter

12/12/2012 3:00 PM

MADISON, WI. December 12, 2012 (Report 50)
The CME Group butter price increased $0.0050 Tuesday and closed at $1.5950.
In the last 5 trading sessions, the butter price has seen a net increase of
$0.0150. The increase may be an indication that butter has reached a price
floor, but some industry analysts remain skeptical and unsure of future
price trends, partly due to the fiscal cliff situation facing Congress.
Cream supplies have become very heavy with increased volumes being channeled
to churns. Some butter makers are continuing to work inventories lower by
not purchasing surplus cream at discounted prices. Other butter makers have
been prompted by the cream price discounts to expand production and
inventories. Increased production of 82%, unsalted butter to fill export
orders has been noted at some plants. Domestic demand has weakened as most
holiday orders have been or are about to be filled. According to the
National Dairy Retail Report, retail butter ads in the Northeast totaled
2,622, 24.6% of the total national ad count of 10,663 and the second highest
number for any region. The weighted average price for a 1 lb. package of
butter in the Northeast was $3.20, 36 cents more than the national weighted
average price and 1 cent more than the previous reporting period. Export
demand has increased, sparked by export incentive programs. Cooperatives
Working Together (CWT) has accepted requests for export assistance to sell
947,988 pounds (430 metric tons) of butter. The product will be delivered
December 2012 through May 2013. During 2012, CWT has assisted member
cooperatives in making export sales of butter totaling 71.5 million pounds
and anhydrous milk fat totaling 127,868 pounds. Current bulk butter prices
range from 4-8 cents over the market based on the CME Group with various
time frames and averages used.
2012 U.S. Butter Imports (USDA-FAS)
(Million Lb.) % Change From % of
1 Year Ago Yearly Quota
Nov Quota Imports 1.23 + 1.4 8.0
Jan. - Nov.
High Tier .36 - 49.1 N.A.
Quota Imports 10.35 + 33.6 67.3

2012 U.S. Butter and Milkfat Exports, (USDA-FAS)

(Million Lb.) % Change From
1 Year Ago

Oct. Total 9.4 + 48
Total, Jan - Oct. 93.2 - 25
1 Saudi Arabia 31.7 + 30
2 Iran 11.5 + 192
3 Morocco 7.4 - 7
4 Egypt 6.8 - 12
5 Mexico 4.9 - 63

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