Despite the slow week for the futures markets, butter had a great week. Butter rallied 16 cents higher this week to close at $2.12. Robin Schmahl of AgDairy says the increase came as a surpise given world markets and other factors.
“Growing Inventories butter manufacturing is strong there’s plenty of cream around,” he says. According to Schmahl, buyers came in strong and because of the timing some traders and analysts are thinking the butter market might have another record high year. “Fundamentally we probably shouldn’t even be at this price,” he says. “But, we’re there and we can be glad for it.”
This week the February export numbers were released by USDA. Without being adjusted for Leap Day, butter exports were up 63% from a year ago. Schmahl says it is important to note that while they are much higher than last year, even with the extra day factored in, they were than half of where they were in 2014. However, there’s still some optimism from that number. “It might be an indication that the bottoms are in,” Schmahl says.
Most of the dairy commodities are struggling. “We are having a difficult time competing with world markets,” he says. “That’s not going to change very quick.” Schmahl says a recent report he read indicated world milk price recover might be delayed until well into 2017.
Notable Highlights This Week:
Blocks down $0.05
Barrels down $0.0375
Butter up $0.16
By: Anna-Lisa Laca
Source: Milkbusiness.com