Report 19 – Released on May 07, 2020

Western European butter prices are mixed. The highest prices are in Germany. The lower price range is higher. The upper price range moved lower. Butter oil prices are lower at the bottom, higher on the top.

Packaged butter sales within the EU in early May have slowed, following heavier late April orders. Butter manufacturers expect order interest to pick up in coming weeks. There is a lot of butter in cold storage. This has resulted in some unevenness among manufacturers asto current production schedules, related to whether new production can be sold right away or whether storage is available. Export shipments are still dealing with some disruption in normal patterns and timing. That further affects production interest.

Sources in Germany report new orders for bulk butter exports. That is helping keep butter production schedules there active. Even with butter prices a bit lower than manufacturers prefer, they are more willing to execute longer term contracts for the assurance of sales so as to avoid dealing with the tight storage situation. Buyers are comfortable with longer term contracts with current pricing.Final regulations governing Private Storage Aid (PSA) for butter were published by the European Commission Monday of this week. Some changes were made to preliminary proposals.

Final rules allow PSA only for butter already in storage. The butter aid rate is 9.83 euros/MT for fixed storage costs and 0.43 euros/MT per day of contractual storage. Thethreshold to qualify is 10 MT in storage. Applications must be submitted between May 7,2020 and June 30, 2020. No volume ceiling has been set so far concerning the butter program.

Western Europe, 82% Butterfat, Free on Board - Port Butter
     Price Range - $/MT:                          2,350 - 2,600


     Western Europe, 99% Butterfat, Free on Board - Port Butteroil
     Price Range - $/MT:                          3,100 - 4,100


     Information for the period April 27 -  May 8, 2020, issued biweekly
     Published by:
     Dairy Market News - Madison, WI
     Eric Graf, 608.422.8590
     Email: Eric.Graf@usda.gov

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