DA451   
DA 
MD DA451 BUTTER HIGHLIGHTS

February 3, 2012 MADISON, WI (REPORT 05)

BUTTER HIGHLIGHTS:  

The CME cash butter price continues to decline and settled at $1.4925 
at week's end, the lowest cash price since late March 2010.  Churning 
activity across the country remains strong as cream supplies are 
reported to be plentiful to the churn.  Although cream supplies are 
plentiful, some cream handlers report that dispersal of the cream this 
week was not as hectic as last week.  In many instances, churns were 
running at or very near capacity levels.  With churning as active as it 
is, butter volumes are generally surpassing demand, thus clearances to 
inventory continue.  Commercial butter demand is fair at best.  Many 
buyers are fully aware of the weak trend in the CME cash butter price 
and are hesitant to place large orders in a declining market.  
International sales have also been limited, but early this week, 
Cooperatives Working Together (CWT) announced the acceptance of export 
assistance requests for nearly 11 million pounds of 82% unsalted butter 
for shipment now through June 2012.  The announcement also included 
cheese assistance with the destinations for the various dairy products 
being: Asia, Europe, the Middle East, and Northern Africa.  This is the 
first butter export assistance since October 2010.
  

1200C  Steve Schneeberger (608)278-4154