MD_DA230                                                              
DA                                                                    
MD DA230   Fluid Milk and Cream Review - Central                      

MADISON, WI.  December 29, 2016 (REPORT 52)                           

On farm milk production suffered minor setbacks due to cold weather in the 
Central region last week, but production in most areas has reestablished the 
steady trend upward. A larger problem has emerged regarding finding 
equipment and/or drivers to transport milk and cream loads between some 
regions. Also, a blizzard moving through the Great Plains delayed delivery 
of some loads as major thoroughfares were closed due to hazardous driving 
conditions. Some milk marketers remarked that end users seem to be using the 
weekend as a wildcard production opportunity to either make up for 
production time that was lost due to plant issues, or extend production time 
due to available spot milk loads. Class I demand is light, with some 
pushback on previously ordered loads.  With light bottling demand, milk 
volumes clearing into manufacturing are inching higher. Some marketers 
indicate they have more than one buyer pledging interest in a number of spot 
loads. Prices on spot milk loads range from $8.00 to $2.00 under the Class 
III price. The DMN National Retail Report-Dairy for December 23-29 noted the 
national weighted average advertised price for one gallon of milk was $2.50, 
down $0.42 from a week ago and $0.22 lower than a year ago. The weighted 
average regional prices in the Midwest and South Central were $2.09 and $2.80, 
respectively. Cream demand is light from frozen dessert/ice cream 
manufacturers as operators in that market sector reassess near term needs. 
However, demand from cream cheese makers has overtaken Class II interest 
within the region. Cream cheese manufacturers report they are generally 
taking all their contracted loads and sometimes adding spot loads as the 
loads come to market. Class II cream multiples are slightly lower, and the 
recent uptick in butter prices is causing some pushback on the multiples 
buyers are comfortable paying. The Class II cream range is 1.12 - 1.20. 

SPOT PRICES OF CLASS II CREAM, $ PER POUND BUTTERFAT                  
F.O.B. producing plants:   Upper Midwest -   $2.4942-2.6724           


1100CT janet.linder@ams.usda.gov 608.557.7003
USDA/AMS/Dairy Market News, Madison, Wisconsin
Dairy Market News website: www.ams.usda.gov/dairymarketnews
Dairy Market News database portal: http://www.marketnews.usda.gov/mnp/da-home