MD_DA240 DA MD DA240 FLUID MILK AND CREAM REVIEW - WEST Madison, WI May 12, 2016 (REPORT 19) Farm milk production is flat to lower this week according to dairy processors. Wet conditions were present by the end of the previous week, shrinking dairy herds' comfort. Sales into Class 1 processing plants are mixed. Orders from grocery stores are up, but steady from food service. Requests from K-12 schools are lower as pipelines are full. Sales into Class 2 are steady to higher. Cottonseed planting is active and close to ending in the next few weeks. Fair/good quality alfalfa hay harvesting is active throughout the state. The June 2016 Class 1 prices in California are $14.35 in the north and $14.62 in the south. The statewide average Class 1 price based on production is $14.37. This price is 48 cents lower than May 2016 and $3.11 lower than June 2015. Higher daytime temperatures, above 100 degrees, are taking a toll on milk yields in Arizona. Bottled milk sales are slowing, as most K-12 schools will be closing during next week. In addition, some costumers are switching from milk to popular summer drinks. Condensed skim sales are even this week. Farm milk production is still increasing in New Mexico, but at a slower pace. According to some industry participants, milk output is near to hitting the seasonal peak and leveling off. Some out-of-state processing plants are helping to clear moderate to heavy manufacturing milk intakes. Bottled milk sales to retailers and food service are slightly down. Class II sales are steady to marginally lower. Some areas of the state are in the middle of the first cutting of fair/good quality alfalfa hay, while other areas finished. According to the DMN National Retail Report-Dairy for the week of May 6-12, the national weighted average advertised price for one gallon of milk is $2.29, $2.18 in the Southwest and $1.79 in the Northwest. Pacific Northwest milk production is rising along seasonal trends. Most processors say they have capacity available to absorb the extra milk. Demand from bottling is steady. In addition, pull from ice cream and other seasonal dairy products are increasing. Manufacturers report milk intakes are well balanced with processing needs. Utah and Idaho milk production is steady to increasing. Manufacturers report milk is readily available for almost all processing needs. Milk intakes are in relatively good balance with manufacturing needs and only a few loads are moving between dairy plants. Cream supplies are mixed throughout the West. In some processing plants, cream is slightly tight as ice cream/frozen dessert and cream cheese makers are steadily pulling moderate cream loads. In addition, the butterfat component in the milk is seasonally trending lower. However, some processors report fair amount of cream available in the market. This week, multiples for all classes are mixed, ranging from 1.06 to 1.22. DAIRY PRODUCTS: According to NASS, hard ice cream production in the West region for March 2016 is 18.6 million gallons, 10.6% higher than a year ago and 26.3% more than the previous month. 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