MD_DA240
DA
MD DA240 FLUID MILK AND CREAM REVIEW - WEST

Madison, WI February 26, 2015 (REPORT 8)

CALIFORNIA milk production continues to build throughout the state, 
but some dairy producers report the expected bump from fresh feed has 
been minimal. This is reportedly related to feed quality. Some 
problems with rising somatic cell counts are also challenging herd 
managers. Sales to bottling plants are mostly steady. Ice cream and 
frozen mix plants are taking in some additional condensed skim to 
fulfill seasonal specialty manufacturing. January 2015 POOL RECEIPTS 
of milk in CALIFORNIA total 3.39 billion pounds, 4.0% lower compared 
to January last year, according to California Department of Food and 
Agriculture.  The January Value at Test price is $15.27, $2.55 lower 
than December 2014 and $6.88 lower than January 2014.  The percentage 
of receipts used in Class 1 products is 14.0%.  The January quota 
price is $15.85 and the over quota price is $14.15.  These prices are 
$2.37 lower than December 2014 and $6.68 lower than a year ago. 
Intakes of farm milk by ARIZONA processors are higher as milk 
production notches seasonal increases. Some milk loads are 
stairstepping across the Southwest to find room at drying facilities. 
Bottler demand trended lower at the beginning of the week but 
suppliers anticipate an uptick in sales early next week, to coincide 
with March's lower Class I milk prices. Milk pooled on the Arizona 
Order 131 totaled 410.8 million pounds in January 2015.  Class I 
utilization accounted for about 27.0% of producer milk.  The uniform 
price was $16.04, $3.38 below last month, and $6.42 below one year 
ago. Farm milk production in NEW MEXICO is strong and continues to 
build from week to week. Sales into bottling drifted lower this week 
as the pipeline is generally full at current volumes. Condensed skim 
and cream sales are also lower this week. Temperatures are variable as 
the season advances. Daytime temperatures are reaching the high 60s, 
but temperatures often fall below freezing at night. Active cream 
interest emerged from various market segments this week. Ice cream and 
aerated cream manufacturers have steady to modestly higher demand 
ahead of the holidays. Butter churn operators are also actively taking 
in spot cream loads to complete holiday print orders. Cream multiples 
shifted up from flat market pricing on the bottom of the range, while 
the top of the range is unchanged, 1.15 to 1.25. At the CME Group, 
Grade AA butter closed Wednesday at $1.6425, down $.0775 compared to a 
week earlier.  According to NASS, January milk production for the 23 
selected states totals 16.5 billion pounds, 2.1% higher than one year 
ago.  January milk production changes from one year ago for selected 
Western states are as follows:  Arizona +3.0%, California -2.6%, 
Colorado +6.2%, Idaho +1.4%, New Mexico -1.9%, Oregon N.C., Utah +6.9% 
and Washington +2.0%. Milk production in Washington and Oregon is 
steady to building slightly.  Processing plants are running on planned 
schedules with some milk being shopped and shipped around.  Weather 
conditions have been mild and conducive for milk cow comfort.  Milk 
output trends across Utah and Idaho continue to move higher on a 
weekly basis at levels above a year ago.  Farm level conditions are 
fair to good for milk growth.  Lower feed prices are helping offset 
the sting of lower milk prices.  There is more optimism in the current 
environment where finished product prices have stabilized.  Milk is 
being handled well with few complications.  There is a good demand 
from Class II producers that are taking milk.  Cheese plants are 
staying at or near capacity.  

1100CT Butch.Speth@ams.usda.gov 608.278.4152
Janet.Linder@ams.usda.gov 608.278.4157
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