Butter determines farm butter fat price.
In Europe, according to Dairy Industry Newsletter "Cream prices have soared, with nothing available for spot sales across Europe, and supplies tied up in contracts."
Today, USDA announced a DEIP bonus for butter to Africa and Middle East. Yet Dairy Market News state on October 1, 2009:
Oceania butter prices are trending slightly higher with a firm market
tone. Milk and milkfat volumes are tending to be lower than expectations and
butter output is below projected early season levels. Local cream supplies are
tight. Butter producers are able to fill the current local demand and prepare
stocks for upcoming contracts.
The high side of Oceania butter is at $1.36 per pound. Butter is even higher in Europe and Dairy Market News states:
Prices have firmed for both butter and butteroil across European markets. Market activity is mainly direct towards local usage as export movement remains slow. Local production of butter continues to trend lower seasonally and supplemental product is being pulled out of the PSA program.
As usual - more questions than answers, but, butter prices should be higher.
A quick supporting comment; Butter production in the U.S. is down. In August butter stocks were 13.5% lower than year ago levels. Powder production is down about 18% from year ago levels.
ReplyDeleteCull cow slaughter in the U.S. is also down almost 10% from year ago levels (year to date) - I know it's hard to believe but it seems to be the case - this number appears to include dairy and beef, maybe the beef numbers are down that much? Week ago numbers cow cull numbers were down over 25% from the same week in 2008 - yet prices suck to no end. Must be everyone quit eating - probably that new starvation diet that soon will be catching on due to no farmers left to produce anything but beans and corn... we'll have to sell most of those crops to the Chinese so they can send us back some real food. By the way, as our food production decreases the population, here and the rest of the world, increases. Where are we going with this? and why?
Jeff Suehring