MD_DA240
DA
MD DA240 FLUID MILK AND CREAM REVIEW - WEST

Madison, WI September 24, 2015 (REPORT 38)

Milk output in California is slightly higher. Lower temperatures in 
the Central Valley are helping to reduce the heat stress of the dairy 
herd. However, production is below previous year levels. Manufacturing 
milk supplies moving into Class 4a (butter/NDM) are steady to higher. 
Class 1 demand is stable as school pipelines are nearly full. 
According to California Department of Food and Agriculture, August 
2015 Class 1 sales in California totaled 54.4 million gallons, 5.5% 
lower compared to August last year. From January through August 2015 
Class 1 sales totaled 437.4 million gallons, 4.8% lower from the 
comparable period in 2014. A cooler climate in Arizona is helping to 
raise the comfort of milking cows. Thus, milk levels are steady to 
higher. Class I demand is steady. Condensed skim demand from NDM 
processors is higher. Harvesting of fair/good quality alfalfa hay and 
corn is active across the state. Milk production is higher in New 
Mexico. The milk yield of the dairy herd is improving due to lower 
temperatures. Manufacturing milk volumes are higher as some processing 
plants are doing maintenance work. Sales of Class I and II products 
are higher in the retail and food service sectors. Some areas of the 
state are starting the sixth cutting of alfalfa hay. According to the 
DMN National Retail Report-Dairy for the week of September 18 - 24, 
the national weighted average advertised price for one gallon of milk 
is $2.69, $2.41 in the Southwest and $2.20 in the Northwest. Pacific 
Northwest milk production is running a little lower and is following 
seasonal declining milk patterns. Manufacturers report sufficient milk 
supplies for processing. Industry contacts say forage supplies are 
adequate. Recent rains have helped pastures green somewhat in parts of 
the region, but the extreme or severe drought conditions persist 
across much of the Pacific Northwest. Milk production in Utah and 
Idaho is steady to lower, but processors are not having much trouble 
getting milk for their needs. Manufacturers note slightly better 
cheese yields as milk components start to improve. Bottlers are 
indicating somewhat stronger sales. The western cream demand from 
cream cheese and butter makers is strong. Some churns are running at 
near to full capacity as Q4 holidays approach. Spot sales of cream are 
active across the West. Cream supplies are mostly adequate. Multiples 
for all classes are lower, ranging from 1.13 to 1.30. The Grade AA 
butter price at the CME Group on Wednesday closed at $3.0250, up 40 
cents from a week ago. According to NASS, August milk production for 
the 23 surveyed states totals 16.3 billion pounds, 0.8% higher than a 
year ago. August milk production changes from a year ago for selected 
Western states are as follows: Arizona +2.2%, California -3.4%, 
Colorado +3.9%, Idaho +0.8%, New Mexico -4.3%, Oregon -2.8%, 
Washington -0.4% and no changes in Utah. Monthly milk production per 
cow for the 23 surveyed is 6 pounds above August 2014. Milk cow 
numbers on farms in the 23 selected states totaled 8.63 million cows, 
43,000 head more than August 2014.

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