Now that the month of October is in the rearview mirror, we have a full picture of what ended up being a record-breaking month in terms of butterfat prices. The price per pound of butterfat reached a new summit of $3.7144 per pound, according to Federal Milk Marketing Order data reported by USDA.

The price for October butterfat shot up 58.8 cents from the September price per pound and was close to $1 per pound higher than the butterfat price of $2.7713 in January of this year. Butterfat saw five months in a row of record-breaking prices in 2022, from June to October, with a price per pound ranging from $3.3323 to $3.6567. Prices retreated after that and remained under $3 per pound in 2023 until August.

This recent butterfat boom is linked to historical high prices for butter in trading on the CME. Butter prices hit new heights for seven days in late September and early October before peaking at $3.5025 on October 6. The average price for the month was $3.3814 per pound, which was also a record high.

Stocks of butter fell rapidly this summer, but the drawdown pace slowed some in September. Stocks as of September 30 were lower than they were in 2019, 2020, and 2021, but they were up 3% relative to September 30 of last year.

Compared to the final day in October, the butter price fell 13-3/4 cents to $3.1425 on November. Butter purchases normally swell in the fall as buyers stock up for the holiday baking season. Once enough inventory is in place, butter prices that reached remarkable heights are likely to moderate.

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(c) Hoard's Dairyman Intel 2023
November 2, 2023
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