MD_DA230                                                              
DA                                                                    
MD DA230   Fluid Milk and Cream Review - Central                      

MADISON, WI.  February 23, 2017 (REPORT 8)                            

Milk production is building across the central region. Some parts of the South 
Central area received beneficial precipitation that will help winter grains and 
early season pastures. Record warm temperatures are prompting some industry 
contacts to suggest the North Central region may have an early and strong spring 
flush. Feedstocks are in good supply, and an early spring would help assure 
adequate forages are available through the expected first hay harvest of 2017. 
Bottling demand is steady and pulling good volumes. Some contacts note a little 
fluctuation of Class I interest due to schools having spring breaks approaching, 
but the overall impact is fairly small. There is plenty of milk available for Class 
III producers. Some processors are trying to slow down production a little as a way 
to control the buildup of cheese inventories. Other manufacturers are content to 
use the available milk to keep cheese facilities at full capacity. Spot loads of 
milk are readily available from within the region and neighboring states. Spot load 
prices range from $2.00 under to $1.00 over Class and vary depending on location 
and expected end use of the milk. A few contacts report loads of milk and condensed 
skim are also moving into the near western regions. Class II demand is steady. Ice 
cream manufacturing is ongoing and production of other Class II dairy products are 
building. Demand from Class IV producers is mixed. A few manufacturers are trying 
to hold back production, feeling some hesitancy of putting butter into cold storage 
while the CME butter price is over $2.10, but others are willing to take a few 
loads of cream at lower multiples and produce print butter for the upcoming spring 
holiday season. Cream is plentiful. Class II cream prices are slightly higher, 1.04 
- 1.20. A few industry contacts note that some flat market cream also changed hands 
that was destined for butter churns. The DMN National Retail Report-Dairy for 
February 17-23 noted the national weighted average advertised price for one gallon 
of milk was $2.62, down $0.23 from a week ago, but $0.25 higher than a year ago. 
The weighted average regional prices in the Midwest and South Central were $2.19 
and $3.25, respectively. The NASS Milk Production report noted January 2017 milk 
production in the 23 selected states was 17.0 billion pounds, 2.6% above a year 
ago. Milk cows in the 23 selected states totaled 8.7 million head, 67,000 head more 
than a year ago. The following table shows Central states included in the report 
and the monthly milk production changes compared to a year ago: 
 
January 2017 Milk Production, (USDA-NASS)

           (Million Lb.)       % Change From
                                 1 Year Ago
  
Illinois            164              ... 
Indiana             359           + 2.0
Iowa                433           + 3.8
Kansas              294           + 8.5 
Michigan            927           + 3.5
Minnesota           828           + 1.7
Ohio                466           - 0.6
South Dakota        218           + 2.8
Texas               995           +19.2 
Wisconsin         2,541           + 1.0

SPOT PRICES OF CLASS II CREAM, $ PER POUND BUTTERFAT                  
F.O.B. producing plants:   Upper Midwest -   $2.2266-2.5692           


1100CT mike.bandli@ams.usda.gov 608.422.8592
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