August 15

8/15 - Butter prices hit 7-year highs of $3.06/lb on 8/3 before backing off to $2.9350 (8/12). Butter output in June was up 2.3% from a year ago, but first half 2022 production was down 2.8% from 2021. Cold storage supplies are 20.0% below year ago levels. Cream availability is tight and Thanksgiving baking season will likely be here before supplies can recover. Expect a strong ($2.75-$3.00) finish to the year, followed by slackening demand in 2023. Year-over-year milk output was finally up 0.2% in June following 7-straight monthly declines. In Friday’s WASDE, the USDA revised 2022 milk production from -0.1% to +0.2%. Higher prices, gains in milk-per-cow yield, and a larger herd should help milk output continue to grow for the balance of 2022. The USDA says more milk will help butter prices drop from a projected $2.7850/lb average in 2022, to $2.3750 in 2023.