MD_DA230                                                              
DA                                                                    
MD DA230   Fluid Milk and Cream Review - Central                      

MADISON, WI.  June 16, 2016 (REPORT 24)                               

SPOT PRICES OF CLASS II CREAM, $ PER POUND BUTTERFAT                  
F.O.B. producing plants:   Upper Midwest -   $2.5659-2.7834           

Many market participants believe farm level milk production has leveled off 
in the North Central area. Warming temperatures and rising humidity have put 
a cap on the increasing milk supply in the Central region. Although farm 
level milk production appears to no longer be climbing, outputs remain high. 
Orders for bottled milk from educational institutions have seasonally 
declined. Bottling plants are sending unneeded loads back to milk marketers 
and balancing plant operators. A few market participants speculate readily 
available spot loads of milk can be more heavily attributed to schools 
closing for the summer than to spring flush levels of milk production at 
this point. They speculate as warmer weather prevails, spot loads of milk 
will be offered at smaller or no discount. Spot loads range from $1.00 to 
$3.50 under class this week. Cream is tightening in the Central region. The 
pull for cream into ice cream is strong. Ice cream and frozen dessert 
manufacturers are dominating the spot cream market. Cream multiples are 
reported from 1.18-1.28 this week. Market participants share that cream is 
more readily available toward the end of the week at lower multiples. The 
cream market undertone is firming. The DMN National Retail Report-Dairy for 
June 10-16 noted the national weighted average advertised price for one 
gallon of milk was $2.32, down $0.12 from a week ago, and $0.31 lower than a 
year ago. The weighted average regional prices in the Midwest and South 
Central were $1.96 and $2.28, respectively. Abnormally dry weather is 
scattered throughout the Central region. However, topsoil moisture is at 
adequate levels for the majority of the region. Farmers in the North Central 
area are making great progress on the first cutting of alfalfa hay. Winter 
wheat and oat harvest is in full swing in the South Central area.                                                                                                                                                                                                                                                                                                                                                                                                                               

1100CT Amy.L.Schmitz@ams.usda.gov 608.557.7004
USDA/AMS/Dairy Market News, Madison, Wisconsin
Dairy Market News website: http://www.ams.usda.gov/market-news/dairy
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