MD_DA240 DA MD DA240 FLUID MILK AND CREAM REVIEW - WEST Madison, WI July 30, 2015 (REPORT 30) Milk production in California is lower. Seasonal high temperatures above 105 degrees are reducing the comfort and yield of cows. The fat and protein components in the milk are slightly declining. There are adequate milk volumes to satisfy local demand of manufacturers. At this time, very few spot milk loads are traveling out of the state to be processed. Class 1 sales in California are lower, while Class 2 are steady. June 2015 pool receipts of milk in California total 3.26 billion pounds, 5.2% lower compared to June last year, according to California Department of Food and Agriculture. Year-to-date through June 2015 receipts are 4.1% lower from the comparable months in 2014. The June Value at Test price is $15.36, $.36 higher than May 2015, and $6.50 lower than June 2014. The percentage of receipts used in Class 1 products is 12.76%. The June quota price is $16.34 and the over quota price is $14.64. These prices are $.40 higher than May 2015 and $6.41 lower than a year ago. Milk output in Arizona is seasonally decreasing. However, the production is above the levels from the previous year. The warm weather and humidity are raising the stress of cows. Some local processors continue clearing up milk supplies from nearby states. Bottlers are requesting more milk volumes as school terms start during the next week. Therefore, the milk levels available for processing are decreasing. Sales for Class II are steady to lower. Some manufacturers are reducing the production of condensed skim mainly due to a drop in the price. New Mexico milk intakes are trending lower. Fewer head of productive cows are contributing with the reduction of the milk output. Some industry contacts report a shrink in the milk herd due to the culling of low yield cows. Adequate volumes of milk are moving around the state for processing. However, some producers report a decrease in milk loads orders from some NDM plants. Out of the state processors continue clearing up milk supplies from New Mexico. Class I and Class II sales are higher. The state is into the fourth cutting of fair/good feeding alfalfa hay, some areas are finishing the third cut. According to DMN National Retail Report-Dairy for week of July 24 - July 30, the weighted average advertised price for one gallon of milk is $2.51 in the Southwest, $2.50 in the Northwest, and $2.49 for the U.S. In the Pacific Northwest, the cyclical heat waves suppress milk production. And the following cooler temperatures and low humidity allow a rebound. The net effect is milk production is showing a little more tightness due to the typical, seasonal declines in milk production. Processors still report plentiful milk intakes for manufacturing. Industry contacts report parts of the region are still working on second crop hay and small grain harvesting. Cooler temperatures and low humidity have aided in a rebound of milk production in Idaho and Utah. Milk production often peaks for Idaho during the month of July and then follows a summer seasonal decline. Manufacturers note components have dropped off. Industry contacts also note crops look good. Corn has done well this summer and should provide quality silage. The occasional rains have reduced hay quality in some areas, but forage supplies are adequate. The Western demand for cream from ice cream, butter, and cream cheese manufacturers continues to be strong. Cream inventories are mostly tight around the region. West cream multiples are steady to higher, ranging from 1.23 to 1.60. At the CME Group, Grade AA butter closed Wednesday at $1.9075, up $0.0325 compared to a week ago. 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