MD_DA440  
DA                                                         
MD DA440 BUTTER - WEST                           

MADISON, WI.  July 8, 2009 (REPORT 27)

WEST BUTTER	

Butter prices continue to erode at the CME, closing at 
1.1850 at midweek, a decline of 3/4 cents from a week ago.  
Western butter markets remain weak with offerings 
available.  Bulk butter interest is limited and producers 
are putting butter in storage for later needs.  Butter 
print orders are fair to good.  Current orders are best for 
store brands with pricing levels and features moving decent 
volumes of butter considering the season.  Churning was 
higher over the holiday weekend with additional cream 
available.  Offerings were lighter than in past years.  
Prices for bulk butter range from 1 cent to 5 cents under 
the market, based on the CME with various time frames and 
averages used.  On July 6, USDA announced initial 2009-10 
DEIP allocations for the period of July 1, 2009, through 
June 30, 2010.  The 2008-2009 butterfat allocations that 
remain uncommitted are 19,235 MT; this balance will be made 
available through the issuance of new Invitation for 
Offers.  Last week, butter stocks in CME approved 
warehouses totaled 102.1 million pounds, 1.5 million pounds 
higher from the previous week.  This compares to 108.1 
million pounds in 2008 and 147.1 million pounds in 2007.  
According to USDA, NASS, U.S. butter production in May was 
139.4 million pounds, down 0.3% or 0.5 million pounds from 
last year.  Cumulative output for the first five months of 
the year totals 749.5 million pounds, down 0.8% unadjusted 
from last year.  May butter production in the Western 
region totals 66.2 million pounds, down 6.6% or 4.7 million 
pounds.  During May, the West produced 47% of U.S. butter 
output.

1500CT Butch.Speth@ams.usda.gov 608.250.3202