MD_DA230                                                              
DA                                                                    
MD DA230   Fluid Milk and Cream Review - Central                      

MADISON, WI.  September 01, 2016 (REPORT 35)                          

SPOT PRICES OF CLASS II CREAM, $ PER POUND BUTTERFAT                  
F.O.B. producing plants:   Upper Midwest -   $2.5498-2.7797           

From north to south, milk production in the Central region is uneven. With a 
relatively mild summer in southern areas of the region, farm level milk 
production is heading incrementally higher. However, in the northern areas of 
the region, farm level milk production is still trending downward. As Class I 
demand trends upward seasonally, sales into manufacturing facilities are 
declining and limited, in many cases, to contractual volumes. Milk marketers 
and manufacturers note the lack of availability of spot milk loads for Class II 
and III production and a decrease in toll manufacturing requests to handle 
above capacity intakes during the week. However, with the holiday weekend 
approaching, buyers are finding improved availability of spot loads. The 
limited spot sales are clearing within a narrow price range, $.50 - $3.00 over 
Class. Milk processors indicate dairy operators throughout the region continue 
to plan for herd expansions within the upcoming quarter and into next year. 
With feed commodities being at relatively low prices, dairy operators indicate 
this time is favorable to them for adding cows. Also, milk processors report 
they are fielding requests from dairy producers for changing milk receiving 
locations. For processors, it is a little early in the year to take on new 
dairy producers, but requests are being collected for consideration ahead of 
calendar year 2017 planning. Cream availability is steady with continued demand 
from Classes II and III producers. Class II manufacturers are running steadily 
for this week but anticipate throttling back on production in the weeks to 
come. Some cream-based products will see less production time on the lines, 
especially for individual serving items that are often carried at sports 
venues, amusement parks, and fairs. Class II cream multiple range tightened, 
ranging from 1.22-1.33, with higher multiples more prevalent at the beginning 
of the week. The DMN National Retail Report-Dairy for August 26-September 1 
noted the national weighted average advertised price for one gallon of milk was 
$2.37, down $0.21 from a week ago, and $0.14 lower than a year ago. The 
weighted average regional prices in the Midwest and South Central were $1.96 
and $3.22, respectively.

1100CT Janet.Linder@ams.usda.gov 608.557.7003;
USDA/AMS/Dairy Market News, Madison, Wisconsin
Dairy Market News website: http://www.ams.usda.gov/market-news/dairy
Dairy Market News database portal: http://www.marketnews.usda.gov/mnp/da-
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