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Butter Market Explores New Heights

The T.C. Jacoby Weekly Market Report Week Ending October 6, 2022

Like a mountaineer surveying Everest from K2, the butter market is exploring new heights. CME spot butter scaled a previously unconquered peak last week, and it didn’t stop there. This week it ascended another 20.25ȼ to a fresh all-time high at $3.5025 per pound. U.S. butter output topped year-ago production by wide margins in January through July.


Like a mountaineer surveying Everest from K2, the butter market is exploring new heights. CME spot butter scaled a previously unconquered peak last week, and it didn’t stop there. This week it ascended another 20.25ȼ to a fresh all-time high at $3.5025 per pound. U.S. butter output topped year-ago production by wide margins in January through July. But in August, the heat sapped milk production and Class II processors sucked up a lot of cream. Butter output slipped 2.1% below already scant August 2022 volumes, marking the lowest production for the month since 2018. Butter output has picked up seasonally, but churns are still running relatively light. Cream multiples are lofty and the futures curve is deterring production. Butter makers are not inclined to buy cream based on $3.50 butter when they face the prospect of selling it for $2.50 a few months from now. Butter is showing no signs of altitude sickness so far, but at this elevation, it may be tough to keep a clear head and firm footing.


October 9, 2023

dairybusiness.com

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