MD_DA440  
DA                                                         
MD DA440 BUTTER - WEST                           

MADISON, WI.  November 18, 2009 (REPORT 46)

WEST BUTTER

Cash butter prices at the CME Group have either held steady or 
increased since October 12.  Since that time, prices have gained 28 3/4 
cents to stand at $1.5250 at midweek.  Retail sales activity is being 
rated as good for the upcoming holiday week with good feature activity 
noted.  There has been some concern about getting orders out in a 
timely fashion.  Cream demand has been very strong from the churns with 
both the base price and multiples moving higher.  Some additional cream 
may become available next week due to the holiday period.  

According to FAS, exports of butter for the first nine months of the 
year total 31.8 million pounds, down 81% from last year.  The decrease 
amounts to 139.1 million pounds or a weekly average decline in exports 
of 3.6 million pounds over the first 39 weeks of the year.  The exports 
for the nine months amount to 2.7% of butter production for that time.  
The top three export destinations, the amount shipped, and the change 
from last year are as follows:  Saudi Arabia 12.1 million pounds, down 
29%; Mexico 5.8 million pounds, -19%; and Egypt 2.9 million pounds, -
82%.  These three countries accounted for 65% of the exports.  Last 
year, Russia and Japan were major destinations accounting for 57.1 
million pounds for the nine month period and this year the volume for 
both is less than 150,000 pounds.  

Also according to FAS, imports of butter under the quota system for the 
first ten months of the year total 12.1 million pounds, more than 
double the volume for the comparable period last year and 79% of the 
annual quota.  The top two sources for the imports are Australia and 
New Zealand, accounting for 75% of the total.  Imports of High-Tier 
butter (above the quota and with a penalty) total about 749,000 pounds, 
about double the volume for last year.   

Last week, CME weekly butter stocks declined 5.6 million pounds to 
stand at 56.0 million pounds.  This compares to 42.1 million pounds 
last year and 81.9 million pounds in 2007.  The decline over the last 
five weeks totals 28.8 million pounds.  This compares to 16.3 million 
pounds for the same period last year and 28.7 million pounds in 2007.  

Prices for bulk butter range from flat to 4 cents under the market, 
based on the CME with various time frames and averages used.


Donaldo.nelson@ams.usda.gov 608.250.3206 
1500C  Robert.Hunter@ams.usda.gov  608.250.3217