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Cash butter buying expected to fall

A dairy market analyst says she’s watching how demand for butter weakens moving into the holidays.

Sarina Sharp with the Daily Dairy Report tells Brownfield market signals earlier this year encouraged processors to sell cream rather than churn.  In recent months grocers have been fearful of running out with the lower inventories.

“We were not going to run out of butter at large, but no grocery store wanted to be the one with empty shelves,” she says.  “They were all showing up in Chicago with a very firm bid under the butter market which has helped to push spot butter prices to all-time highs.”

Now that supplies are sufficient, Sharp says consumers may see butter “on-sale” from retailers and cash butter prices will likely soften.

“The price is probably going to be dropping pretty sharply but still be historically high because we didn’t make any more butter than we had in the past,” she explains.

Sharp anticipates bids to drift well below $3 a pound through the end of the year.

Brownfield interviewed Sharp during this week’s Michigan Ag Credit Conference in East Lansing.