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Butter demand shows strength, export weakness slowing cheese

A dairy economist says domestic demand for butter remains strong as consumers are turning to less substitutes.

Vice President of Global Operations and Insights Alyssa Badger with Highground Dairy tells Brownfield that has been a bright spot for dairy.

“Butter inventories between May and June saw the strongest drawdown that we’ve seen since 1984,” she shares.  “So really strong demand for butter, inventories are still slightly above prior year, but are beginning to improve.”

Meanwhile, she says cheese stocks are heavy.

“The growing monthly stocks point to the issues that have basically plagued the markets throughout this year, and that’s been weak international demand that has ultimately caused these inventories to rise,” she says.

Badger says demand from Southeast Asia has been weak this year with Japan’s government supporting milk production and limiting imports.

Global milk production is expected to contract from major regions like New Zealand and Europe.  Badger says that combined with reduced supplies in the U.S., should help support dairy farmer prices through the end of the year.