Butter prices set a new record Aug. 22 on the Chicago Mercantile Exchange (CME), reaching $2.8225 per pound, according to The Journal Sentinel. The previous record was set in 1998 at $2.81.

Butter began the month at $2.40 per pound cash on the CME, and was at $2.7750 per pound at close of business Sept. 2.

Butter stocks in cold storage are down 42 percent from this time last year, according to the Aug. 22 National Agricultural Statistics Service Cold Storage report. Only 170,207 pounds of butter were in storage July 31, 2014, compared to 295,751 pounds July 31, 2013.

Demand for dairy product exports is up across the board, as rising incomes in developing markets are increasing demand for higher-cost foods. The U.S. is now the world's second-largest exporter of milk products after New Zealand, according to Bloomberg. An increased demand for cheese has also diverted milk away from buttermaking, increasing the cost of butter.

The Aug. 21 USDA National Dairy Retail Report (PDF, 52KB) put consumer prices at an average of $3.36 per pound nationally.

—Summarized by Progressive Dairyman staff from cited sources