The cash price for butter topped a new-all time high Thursday, reaching $2.84 a pound on the Chicago Mercantile Exchange.
The previous all-time high was $2.8225 a pound on Aug. 21.
The market is being driven by buyers who are concerned about being short of supply to meet the sales commitments they have, market-watchers say.
Still, «We’re not going to run out,» of butter, said Robin Schmahl, owner of AgDairy LLC, a commodity brokerage in Elkhart Lake.
Demand remains strong as protein increasingly becomes a focal point of diets in the U.S. and around the world, especially in countries that have growing middle classes.
«It’s just got these buyers into a mode where they just have to buy whatever’s there,» Schmahl said. «Buyers just remain so aggressive.
«Consumers are buying and there is this feeling out there that supply is just not as comfortable as (buyers) would like to see it.»
The prices will almost certainly come down, but when is anybody’s guess.
«We’ve kind of got our eyes peeled,» for signs of a price decline, said Curtis Bosma, an account manager at High Ground Dairy brokerage in Chicago.
The price of butter contributes, at least partially, to the price Wisconsin farmers receive for the milk they produce.
«It does have some impact,» Schmahl said.
Wisconsin has 10,860 dairy farms that produce 3.2 billion gallons of milk each year.
The state is the second-leading butter producer in the U.S. behind California.
Source: Journal Sentinel
