MD_DA240
DA
MD DA240 FLUID MILK AND CREAM REVIEW - WEST

Madison, WI February 4, 2016 (REPORT 5)

Farm level milk intakes are ramping up in California. Bad weather 
conditions were present during the past weekend in the Central 
Valley. However, the milk yields were only marginally affected. 
Demands for Class 1 and Class 2 are steady. Some dairy farm operators 
continue importing fair/good quality alfalfa hay from nearby states. 
The January 4a price (butter/powder) in California is $13.26, down 
$1.29 from the previous month, but 17 cents higher than a year ago. 
This compares to the Federal Order Class IV price of $13.31 for 
January. The January 4b price (cheese) is $13.08, 18 cents above the 
previous month, but 67 cents lower from a year ago. This compares to 
the Federal Order Class III price for January at $13.72. In Arizona, 
the weather conditions are conductive to dairy cow comfort. As a 
result, milk production is increasing incrementally. Sales into Class 
I bottling plants are lower as some are closed due to repairs and 
maintenance projects. Sales of condensed skim into Class II accounts 
are higher this week. Milk output is flat in New Mexico. One month 
has been passed since the winter storm Goliath hit many dairy 
operations in the state. Consequently, milk volumes were very tight 
in some balancing plants. At this point, milk intakes moving into 
these processing plants are improving. Sales into Class I, Class II 
and III are steady. Sales into Class IV are higher. According to the 
DMN National Retail Report-Dairy for the week of January 29 to 
February 4, the national weighted average advertised price for one 
gallon of milk is $2.25, $2.23 in the Southwest and $1.77 in the 
Northwest. Pacific Northwest milk production is steady to higher. 
Although there is still a lot of wet weather, milk intakes have 
increased slightly due to some warmer temperatures improving cow 
comfort. Schools continue to place a steady pull on milk for 
bottling. Utah and Idaho milk production is steady. Manufacturers say 
they have plenty of milk for processing. A winter storm provided 
heavy snows in parts of the region over the last weekend. Industry 
contacts report good winter conditions are providing the mountain 
snowpack that will help replenish the reservoirs and give plenty of 
water for early season irrigation needs. In the West, cream 
availability is steady to improving. Heavy cream supplies are 
clearing into butter manufacturing. Interest from ice cream and cream 
cheese makers is inching up. The market undertone for cream is light 
to moderate. This week, multiples for all classes are higher, ranging 
from 1.05 to 1.26. At the CME Group, Grade AA butter on Wednesday 
closed at $2.1600, down 4 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-
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