MD_DA440  
DA                                                         
MD DA440 BUTTER - WEST                           

MADISON, WI.  February 3, 2010 (REPORT 05)

WEST BUTTER


Wednesday's butter trading at the CME Group closed at $1.3450.  The 
close on Wednesday was the first price advance in over two weeks of 
trading.  Five loads were sold on Wednesday with the price gaining 
$.0350.  The past five trading sessions have had total sales of 18 
loads.  Churns are running on busy schedules in most areas.  Sales are 
reported good with excess inventory continuing to be stored for later 
use.  Some producers are offering butter on the spot market and to the 
CME.  Larger churns are making some 82% to be used for export offers.  
Some smaller manufacturers report lighter supplies of cream than 
desired, although contract sales continue to be filled.  Food service 
orders are picking up to help clear supplies.  According to the CME 
Group, weekly butter stocks increased by 1.6 million pounds last week to 
stand at 52.9 million pounds.  Butter inventories have been building for 
the last seven weeks.  This total compares to 60.4 million pounds in 
2009 and 102.1 million pounds in the comparable week in 2008.  According 
to the NASS Dairy Products report, December butter production for the 
U.S. totals 149.6 million pounds, down 4.3% or 6.7 million pounds from 
last year.  Output in the Western region totals 76.1 million pounds, 
down 0.7% from December 2008.  The West produced 50.9% of the butter in 
the U.S. in December.  Cumulative output for the year for the U.S. is 
1.57 billion pounds, down 4.6% from the same period in 2008.  This works 
out to a decline of 76.3 million pounds.  Prices for bulk butter range 
from 1 to 5 cents under the market, based on the CME with various time 
frames and averages used.  


1500C  Robert.Hunter@ams.usda.gov 608.250.3217