6/10 – While rain-delayed Midwest crops and China’s hog situation have dominated the commodity news, butter prices have been quietly creeping higher. U.S. milk supplies are tightening due to lower cow herd numbers and cream for butter processing is reported to be short in the Midwest. In last week’s Dairy Products Report, the USDA said butter output in April was down 4.8% from a year ago, and March output was revised (downward) to 4.6% below last year. The U.S. has been a net butter importer for the past 10 months, and relatively inexpensive world prices have helped cap U.S. prices so far. But growth in world milk output is slowing while demand for full fat dairy products and butterfat continues to climb. YTD butter prices are averaging at $2.28 vs.$2.24 in 2018. But 2nd half 2019 butter prices look to be in the $2.40 range vs. $2.25 last year.