MD_DA240
DA
MD DA240 FLUID MILK AND CREAM REVIEW - WEST

Madison, WI January 21, 2016 (REPORT 3)

California farm level milk output is up. However, some producers are 
anticipating a slight drop in production due to the bad weather 
forecasted for the rest of the week. Most balancing plants are 
running at full capacity. Class 1 demand from the retail and food 
service sectors is steady to higher. Interest for Class 2 is even. 
Milk production is still rising in Arizona. The weather has been 
advantageous for milking cows. Class I sales are steady to lower. 
Manufacturing milk volumes moving into Class IV are higher. Condensed 
skim processing is steady and supplies are sufficient. Milk pooled on 
the Arizona Order 131 totaled 424.7 million pounds in December 2015. 
Class I utilization accounted for about 27.2% of producer milk. The 
uniform price was $16.24, $1.04 below last month and $3.18 below one 
year ago. Dairy farmers of New Mexico continue replenishing their 
milking cow number. This week, farm level milk production is steady 
to lower. As a result, manufacturing milk volumes are decreasing. 
Some balancing plants are running below capacity. Class I demand has 
become stable as the school and retail orders have flattened. Sales 
into Class II and Class III are lower. According to the DMN National 
Retail Report-Dairy for the week of January 15-21, the national 
weighted average advertised price for one gallon of milk is $2.62, 
$2.83 in the Southwest and $2.50 in the Northwest. In the Pacific 
Northwest, steady rains over the last week have led to muddy dairy 
paddocks and have suppressed milk production slightly. Milk 
components are increasing. Bottling demand has picked up following 
the winter holidays. Consumers continue to have increased interest in 
higher fat content milk. Utah and Idaho milk production is following 
seasonal patterns. Milk intakes have rebounded as temperatures 
climbed from the previous cold streak several weeks ago. Industry 
contacts say parts of the region have received precipitation in 
excess of water needs for the coming growing season. Processors say 
there is plenty of milk for manufactured products. Milk pooled on 
Pacific Northwest Order 124 totaled 738.6 million pounds in December 
2015. Class I utilization accounted for about 23.5% of producer milk. 
The uniform price was $15.68, $1.00 below last month and $3.19 below 
one year ago. In the West, cream continues to clear into butter 
churns. In addition, some processors are actively using cream 
supplies to make sour cream and dips as the Super Bowl approaches. 
Multiples for all classes are lower, ranging from .98 to 1.16. At the 
CME Group, Grade AA butter price on Wednesday closed at $2.1325, up 
3.25 cents from 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: http://www.ams.usda.gov/market-news/dairy
Dairy Market News database portal: http://www.marketnews.usda.gov/mnp/da-
home