MD_DA240
DA
MD DA240 FLUID MILK AND CREAM REVIEW - WEST

Madison, WI September 17, 2015 (REPORT 37)

California milk production is lower. The recent high temperatures and 
humidity in the Central Valley are adversely affecting the milk yield of 
dairy cows. Some dairy operators are importing fair/good quality alfalfa hay 
from nearby states due to the prolonged water crisis. The availability of 
spot milk loads is low in the market. Fluid milk demand from schools and 
grocery stores is steady at customary levels. Demand for Class 2 is lower. 
The October 2015 Class 1 prices in California are $17.37 in the north and 
$17.64 in the south. The statewide average Class 1 price based on production 
is $17.38. That production average price is $0.71 lower than September 2015 
and $8.72 less than October 2014. Milk output in Arizona is lower. The 
combination of rain showers and high humidity is taking a toll on the dairy 
herd comfort. Although manufacturing milk volumes are lower, balancing plants 
are running along with planned schedules. Orders from bottlers are steady as 
most of the school pipelines are at comfortable levels. Milk pooled on the 
Arizona Order 131 totaled 360.5 million pounds in August 2015. Class I 
utilization accounted for 30.3% of producer milk. The uniform price was 
$15.88, $.12 above last month but $8.40 below one year ago. Milk volumes in 
New Mexico are steady to lower. Wet conditions in some dairies are adversely 
affecting milk production. Manufacturing milk volumes are lower but 
sufficient to meet needs of balancing plants. Orders from bottlers are lower 
as most of schools pipelines are at near or full capacity. Class I sales are 
steady to higher. Condensed skim sales are steady. The state is in the fifth 
cutting of alfalfa hay. According to the DMN National Retail Report-Dairy for 
the week of September 11 - 17, the national weighted average advertised price 
for one gallon of milk is $2.45 and $2.56 in the Southwest. Cooler 
temperatures in the Pacific Northwest are aiding in cow comfort. Processors 
report slightly lower milk intakes as milk production is in a slow seasonal 
decline. Fluid milk diverted into bottling has stabilized with most schools 
now in session. Although parts of Utah and Idaho experienced localized 
flooding, the rain that fell earlier this week is mostly a welcome relief for 
the region. Many farmers hope the rains will set the stage for enough water 
for next year. Current milk production is steady to lower. Milk components 
are starting to increase following seasonal patterns. Farmers are looking at 
feed supplies and feed quality going into the winter. The corn crop looks 
good, but hay quality may be an issue. Higher quality hay may be less 
available and farmers are reworking rations to maintain milk production. 
Western cream demand from butter churn operators and cream cheese makers is 
active as Q4 approaches. Cream supplies are less tight in the West. The 
increase of milk bottling is making cream more available for processing. In 
addition, the demand for cream from ice cream and frozen desserts 
manufacturers is trending seasonally lower. Cream multiples in the West are 
lower, ranging from 1.20 to 1.35. At the CME Group, Grade AA butter closed 
Wednesday at $2.6250, up 15.25 cents from last Wednesday.

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: http://www.ams.usda.gov/market-news/dairy
Dairy Market News database portal: http://www.marketnews.usda.gov/mnp/da-home