Report 19 – Released on May 13, 2021

The Oceania butter price range is lower. However, the price range remains higher than anyperiod during 2020. At the last GDT event on May 4 butter prices declined by a far greaterpercentage than dairy powders or cheddar. New Zealand sources note that more butter volumeswere added for the May 4 GDT event, which is believed to have been a significantcontributing factor in the magnitude of the butter price decline. Yet butter prices alsodeclined at many New Zealand butter plants in sales separate from GDT sales.

The rest of the story, according to sources, is that hefty increased late season March andApril milk production occurred in the North Island areas of Waikato and Taranaki. That iswhere there is a concentration of butter plants. Logistics make it quite inefficient toattempt to transport milk to the South Island for uses other than butter. Unlike in theUnited States, the New Zealand dairy model tends not to accommodate long distance milkmovement to balance supplies. New Zealand milk tends to go to the type of plant somewhatproximate to where the milk is produced. So the late season milk production spike resultedin late season uncontracted butter to be sold. Thus, adding butter to GDT volumes resultedfrom the production spike. That also accounts for many plants having butter to move off theGDT event. Ultimately this led to weaker butter prices.

 Oceania, 82% Butterfat, Free on Board - Port Butter
     Price Range - $/MT:                          4,975 - 5,200


     Information for the period May 3 - 14, 2021, issued biweekly

Secondary Sourced Information:

At GDT event 283 on May 4, 2021, the butter all contracts price, $5,035, decreased 12.1percent. The June contract, $5,020, decreased 12.2 percent.

January – March 2021 butter exports from Australia 7,100 MT, increased 169.1 percent fromJanuary – March 2020, according to CLAL data made available to USDA. The main export destinations January – March 2021, quantities, and percent change from January – March2020, were China, 2,306 MT, +928 percent; Singapore, 621 MT, +347 percent; and Thailand,487 MT, -25.64 percent.

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

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