MD_DA240
DA
MD DA240 FLUID MILK AND CREAM REVIEW - WEST

Madison, WI July 09, 2015 (REPORT 27)

California milk output continues its downward trend. Some dairy 
farmers report a decline in the solid components of the milk. 
This situation is negatively influencing its operational 
returns. In addition, they are purchasing expensive water. Some 
dairies continue importing fair/good alfalfa hay from Nevada, 
Utah, and Oregon. Class 1 demand is higher and steady for Class 
2. Frozen dessert and ice cream manufacturers are taking steady 
loads of milk and condensed skim. Arizona milk production has 
seen declines from week to week, under pressure from high 
daytime temperatures. However, the state has sufficient levels 
of milk. Processors are getting enough loads, helping to clear 
the volumes of nearby states. Bottling orders have been 
restocking after the long holiday week. The intake of milk in 
New Mexico is seasonally lower. However, the state has adequate 
levels. Some milk processors are still sending loads of milk to 
Midwest. Heavy rains are falling in most parts of New Mexico. 
With these showers, farmers expect a slight improvement in the 
quality of feeding hay. The sales for Class I and Class II are 
slightly higher. According to DMN National Retail Report-Dairy 
for week of July 3 to July 9, the weighted average advertised 
price for one gallon of milk in the Southwest is $2.98, 89 cents 
above the national price. The cream market tone remains 
balanced. Some butter makers continue reporting a fall in 
production due to a shortage of solid components in the 
processed milk. Nevertheless, the region has plenty of cream and 
has been requested by some processors in Central states. High 
demand continues, pulled by orders from ice cream plants and 
butter churns. Cream is being sought by manufacturers from 
inside and outside the region. Cream multiples are higher this 
week, ranging from 1.20 to 1.35. Grade AA butter closed 
Wednesday at $1.9200, down $0.0100 compared to a week ago. The 
recent heat wave in the Pacific Northwest has placed a strain on 
cows. Industry contacts note a reduction in milk intakes and 
milk components, but also say there is plenty of milk available 
for processing. The early part of the week provided slightly 
lower temperatures. If temperatures can moderate further, milk 
production may come back somewhat. Demand for cream has been 
strong with the seasonal increase in ice cream production. A few 
regional showers have provided some relief from the heat within 
Idaho and Utah. However, dairy manufacturers are still observing 
lower milk intakes and components. The reductions are following 
typical seasonal trends, but have appeared earlier than usual 
this year. Milk production is still sufficient to meet 
processing needs. Strong ice cream production has increased the 
demand for cream.  





1100CT 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