#Butter sets new record

Share on twitter
Share on facebook
Share on linkedin
Share on whatsapp
Share on email

Butter price set a new record high of $2.62 on July 23 reflecting what is taking place in the country.

Many plants are producing butter to fill contracts and selling any extra cream to the marketplace.

High cream price has limited the desire of plants to purchase extra cream to produce more butter than current demand. This creates a loop in which extra butter is not being produced in order to bolster supply.

It is almost as if the market is creating its own shortage. Supply is available, but at increasingly higher prices potentially creating another concern of shutting off demand. Slowing demand will not have much impact on the market for a time as the market will be glad that inventory is growing.

There is much concern over supply through the end of the year. For the week ending July 25, Cheddar blocks ended at $1.97, down 5.75 cents. Barrels ended at $1.9525, down 11.75 cents. Butter moved to $2.59, up 11 cents. Grade A non-fat dry milk slipped 2 cents to $1.6750. There were 11 loads of blocks, 14 loads of barrels, 10 loads of butter and 2 loads of nonfat dry milk traded.

Milk supply tightens

There has not been much change in milk output lately other than a seasonal decline. Milk supply is tightening, but is no way short of supply. Buyers looking for excess milk are finding it, but not at the reduced prices it once had.

Production is not expected to fall off substantially as feed is more available and bouts of hot weather are followed by cooler weather, allowing for cows to experience some relief. Fluid milk sales are steady as summer progresses.

Cheese orders adjusted lower

Cheese is readily available for demand, but supply is tighter in some areas than others. Lower milk receipts are reducing cheese production. At the same time, export demand has slowed, which is keeping supply and demand somewhat stable.

Condensed skim milk is being used to boost cheese yields. Reports of tight cheese supplies are coming from various plants in the Midwest.

Demand remains strong with cheese production reduced due to lower cheese yields. This has not created a shortage, but is causing some orders that have been placed for August to be reduced due to less availability.

June inventory declines

Cheese and butter inventories are not increasing indicating that stocks should decline the rest of the year from current levels. Stocks seasonally decline during the second half of the year so these declines are taking place a bit sooner than usual.

June stocks of American cheese increased just 1.1 million pounds from May totaling 657.5 million pounds, but remained 7 percent lower than a year ago. Swiss cheese stocks increased 1.0 million pounds or 3 percent from the previous month at 31.5 million pounds and are virtually unchanged from a year ago.

Other cheese stocks declined 6.0 million pounds or 2 percent to 372.5 million pounds and are 9 percent below last year. This put total cheese stocks down 4.0 million pounds from May at 1.062 billion pounds. This is down 8 percent from last year.

Butter stocks declined 6.4 million pounds or 3 percent from May and are at 186.1 million pounds. Stocks are 42 percent lower than last year. This is causing concern for buyers as there is fear supply will tighten substantially through the end of the year.

AMS prices

For the week ending July 19, Agricultural Marketing Service (AMS) prices were mostly higher. Prices for 40-pound cheddar blocks declined 2.2 cents to $2.01. The price for 500-pound barrels, adjusted to 38 percent moisture, averaged $2.04, down 1.5 cents. U.S. Department of Agriculture grade AA butter averaged $2.37 for the week, up 5.6 cents.

Non-fat dry milk averaged $1.87, down 1.4 cents. Dry whey averaged 68.7 cents, down 0.1 cents.

Source: Agriview

Mirá También

Así lo expresó Domingo Possetto, secretario de la seccional Rafaela, quien además, afirmó que a los productores «habitualmente los ignoran los gobiernos». Además, reconoció la labor de los empresarios de las firmas locales y aseguró que están «esperanzados» con la negociación entre SanCor y Adecoagro.

Te puede interesar

Notas
Relacionadas