MD_DA240 DA MD DA240 FLUID MILK AND CREAM REVIEW - WEST Madison, WI May 14, 2015(REPORT 19)**Updated California Class 1 prices Dairy processors indicate overall milk production is lower in California. Some operators report the pace of the decline is sharper than anticipated. Despite the recent decreases in milk production, there have been some instances in recent weeks of plant operators collaborating on clearing milk loads to meet acceptable processing time deadlines. **The June 2015 Class 1 prices in California are at $17.47 in the north and $17.74 in the south. The statewide average Class 1 price based on production is $17.48, $0.40 higher than May 2015 but $7.64 lower compared with last year. Arizona milk production is declining steadily as warm weather settles into the state. Sales into bottling facilities are steady to lower as consumers switch to summertime drinks with meals. Cream demand is active, with higher demand than can be filled on a week to week basis. This is partially due to components in milk intakes trending lower. Milk production in New Mexico posted some week over week gains, according to milk haulers. Sales into Class I are lower compared to last week. However, condensed skim sales into Class II facilities moved higher as both individual and family-size packaged varieties production shifted higher as warmer weather advances. Handlers report they are getting some help from out-of-state processors to handle the milk volumes needing timely processing. Cream buyers/end users report cream availability in the western region is tight in the f.o.b. spot market. They attribute this market condition to ice cream/frozen dessert and cream cheese manufacturers increasing cream steadily this month to meet existing orders. Multiples are steady to higher, ranging from 1.24 to 1.30. Buyers/end users balked at some cream spot loads priced above this range. At the CME Group, Grade AA butter closed Wednesday at $2.0600, up $.1700 compared to a week earlier. PACIFIC NORTHWEST milk production is at spring flush and market participants report milk readily available for manufacturing. Processors are able to use most milk produced close to the facility for their own processing needs. There is a growing concern across the region that the Western drought may begin to impact prices and availability of forage for cows and subsequently milk for processing. IDAHO and UTAH milk is readily available. There seems to buyer interest in cream for ice cream production and from buyers outside the region. 1100CT Janet.Linder@ams.usda.gov 608.557.7003 Mike.Bandli@ams.usda.gov 608.557.7010 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