MD_DA240 DA MD DA240 FLUID MILK AND CREAM REVIEW - WEST Madison, WI October 29, 2015 (REPORT 43) The remnants of Hurricane Patricia were not a major issue to the milk production in the southwest. Favorable weather to cows prevails in the Central Valley. Thus, milk production is slightly rising in California. Sales into Class 1 are trending up. Class 2 orders are steady. However, manufacturing facilities are running below peak levels. Availability of local supreme quality alfalfa hay is tight. According to California Department of Food and Agriculture, September 2015 pool receipts of milk in the state total 3.05 billion pounds, 4.1% lower compared to September last year. From January through September 2015, receipts are 4.1% lower from the comparable months in 2014. The September Value at Test price is $16.00, 60 cents higher than previous month but $7.55 lower than September 2014. The percentage of receipts used in Class 1 products is 14.87%. The September quota price is $16.68 and the over quota price is $14.98. These prices are $.35 higher than August 2015 but $7.47 lower than a year ago. Milk output in Arizona is flat as weather conditions are mostly unchanged. According to some processors, the butterfat component level in the milk is rising. Bottled milk orders from groceries stores and food service are improving. Condensed skim milk demand from NDM producers is steady to lower. Lower temperatures and humidity are supporting the comfort of cows in New Mexico. Thus, milk production is higher. Milk sales into Class I are steady. Sales into Class II and Class IV are lower as some processing plants are confronting technical issues. The state will start soon the last cutting of alfalfa hay of the year. According to the DMN National Retail Report-Dairy for the week of October 23 - 29, the national weighted average advertised price for one gallon of milk is $2.60, $2.71 in the Southwest and $1.99 in the Northwest. Milk production in the Pacific Northwest is trending downward along seasonal patterns. Bottling demand is steady, but processors note a shift in consumer preferences toward higher fat choices. Manufacturers say milk intakes are adequate for processing needs. Utah and Idaho milk production is steady to lower. Manufacturers describe milk availability as balanced. Additional loads of milk can be purchased as needed. Most of these loads do not carry a premium price. Industry contacts state much of the corn is harvested for the year. Forage quantities are healthy. Western cream demand continues strong. Interest for cream from butter processors is improving as Thanksgiving and Christmas holidays approaches. Spot and contract sales of cream to sour cream, cream cheese, and half-and-half processing plants are active throughout the region. Cream supplies are mostly mixed. Western cream multiples are steady to lower, ranging from 1.12 to 1.27. At the CME Group, Grade AA butter price on Wednesday closed at $2.6400, up 22 cents from a week ago. Dairy Market News Reporting Changes Proposal Dairy Market News (DMN) is proposing updating the Dairy Market News Working Guidelines. This proposal is the result of an industry comment period. The updates would allow DMN market reports to additionally include information and sales prices reported by individuals and firms functioning as marketing agents selling on the behalf of dairy product manufacturers. The Working Guidelines updates are intended to capture more information on pricing and market conditions and reflect the evolution of the marketing of dairy products. Currently, market pricing information is collected for first sale, f.o.b. producers' plants or warehouses. The changes would be effective starting with Report 1, January 2016. Comment by October 30, 2015 to: DMN@ams.usda.gov Link to current DMN working guidelines: http://www.ams.usda.gov/market-news/individual-dairy-market-news-commodity- reports 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