MD_DA240
DA
MD DA240 FLUID MILK AND CREAM REVIEW - WEST

Madison, WI July 01, 2015 (REPORT 26)

Milk production in California is trending down. The severe lack of 
water and the hottest temperatures are negatively affecting the milk 
yield of cows. The National Weather Service issued an excessive heat 
warning for the Sacramento Valley, with temperatures ranging from 110 
to 115 degrees. In addition, the precipitation probability remains at 
0% for the Central Valley, continuing shorting soil moisture levels. 
This issue is reducing the local alfalfa hay availability for feeding. 
Some dairies are importing hay from neighboring states. Class 1 demand 
is mixed and steady for Class 2. Milk output in Arizona continues 
seasonally decreasing. The high temperatures, above 105 degrees, are 
raising the heat stress of cows. This situation is adversely affecting 
their productivity. However, milk plants continue getting enough milk 
loads, helping clear up milk volumes from nearby states. Bottled milk 
demand is unchanged at usual summer levels. Milk volumes in New Mexico 
are seasonally lower. Nevertheless, there are plenty of milk volumes 
in the state. In addition, plentiful loads of milk are coming from 
neighboring states. Some processors are running at full capacity and 
clearing milk loads to Central states. New Mexico has plenty of 
fair/good pasture to feed cows. All the state's regions are in the 
third cutting of alfalfa. The sales into Class I and Class II are 
slightly lower this week. According to DMN National Retail Report-
Dairy for week of June 26-July 2, the weighted average advertised 
price for one gallon of milk in the Southwest is $2.33, five cents 
below the National price. The cream market tone is balanced. Some 
churns are reporting a reduction in production due to a deficiency of 
solid components in the processed milk. However, the West has plenty 
of cream. A big part the cream output is pulled by orders from ice 
cream/frozen desserts manufacturers due to good seasonal demand. Cream 
multiples are unchanged, ranging from 1.21 to 1.25. Grade AA butter 
closed Tuesday at $ 1.9175, up $0.0200 compared to a week ago. The 
Pacific Northwest normally sees strong milk production well into July, 
however industry contacts report they have already started to see 
decreases in milk intakes.  Recent hot, dry weather has been putting 
strains on cows and milk cooling equipment. It is anticipated that hot 
days and warm nights may reduce milk production further. Processors 
report they still have access to plenty of milk and cream is generally 
available. Some processors continue to sell off loads of cream. The 
seasonal increase in ice cream production is pulling cream from other 
uses. Industry contacts in Idaho and Utah report milk production is 
beginning to slow, following typical seasonal trends. Milk is still 
readily available for processors, however some manufacturers have 
started seeing the components in milk drop. Current hay production is 
proceeding. Some sources suggest hay may not be as plentiful as in an 
average year and there may be some pull for hay from outside the 
region later in the summer.


1430CT Angel.Teran@ams.usda.gov 608-557-7011
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