Report 13 – Released on March 28, 2019

Butter prices in Oceania firmed. Available stocks of butter are tighter, and buyers are engaged in securing what they believe they need. The firming market tone is discouraging delays in closing deals. Buyers are finding that non-GDT pricing for deliveries in coming months is leading the GDT results last week.

Butter markets seem likely to maintain strength in coming months. Buying interest is strong, with buyers and manufacturers being aware that seasonally lower milk production is limiting churning. This is expected to support butter price strength. Australian butter production is generally striving to keep up with domestic demand. New Zealand continues to be the primary source for butter imported to Australia. Capacity and proximity are strong factors in this ongoing pattern.

 Oceania, 82% Butterfat, Free on Board - Port Butter
     Price Range - $/MT:                          5,100 - 5,300


     Information for the period March 18 - 29, 2019, issued biweekly

Secondary Sourced Information:

Butter exports from Australia during January 2019, 1,600 MT, were up 80.3 percent from January 2018, according to CLAL.

This percentage increase is considered illusory in the expected annual outcome. One month, especially January, is easily skewed by large buyers who were waiting until the new year to commit to new purchases. Capacity, timing, and current seasonal milk production will keep annual exports of butter far closer to recent year totals than to the January percentage results.

The table below shows the top export destinations and country percent change comparing January 2019 with January 2018.

Australia Butter Exports
      January 2019/January 2018

                               % Change Jan.
     Destination        MT     2019/2018

     Thailand           596    +407.0
     United States      438    *
     Taiwan             133     +56.4
     Indonesia          112     +45.6

     *No exports to U.S. January 2018

At GDT event 232 on March 19, the butter all contracts price, $5,089, increased 9.3 percent. The April contract, $5,100, increased 8.4 percent.

Published by:
     Dairy Market News - Madison, WI
     Eric Graf, 608.422.8590
     Email: eric.graf@ams.usda.gov

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