MD_DA240
DA
MD DA240 FLUID MILK AND CREAM REVIEW - WEST
Madison, WI July 14, 2016 (REPORT 28)
In California, temperatures remain similar to the previous week. 
Consequently, farm milk yields are steady this week. However, milk 
butterfat continues at the lowest level of the year. Bottled milk 
sales to retailers are higher as many grocery stores are restocking 
shelves. Meanwhile, orders from restaurants are steady. Condensed 
skim demand from NDM processors is strong. Interest for flavored 
milk, as chocolate milk, is active. Ice cream sales are seasonally 
inching up. Dairy farmers' demand for premium/supreme alfalfa hay is 
picking up, but supplies are tight in California. Consequently, dairy 
operators are buying high quality alfalfa hay from nearby states. The 
August 2016 Class 1 prices in California are $16.37 in the north and 
$16.64 in the south. The statewide average Class 1 price based on 
production is $16.38. This price is $1.50 higher than July 2016, but 
$1.29 lower than August 2015. Farm milk production in Arizona has 
plateaued, as daytime temperatures are slightly lower this week. 
Bottled milk requests from the retail sector are lower as interest 
for soft drinks and other popular summer beverages inch up. Class I 
sales to the food service sector are even. Condensed skim sales are 
slightly lower as some NDM processing operations have 
repair/maintenance work throughout the week. Demands for Class II 
dairy products as ice cream and frozen desserts are seasonally 
strong. Milk output is trending lower in New Mexico. The warmer 
climate is rising heat stress in dairy cattle. Class I sales to 
supermarkets and restaurants are higher this week. Sales into Class 
II are lower. Condensed skim demand from NDM producers is active. 
Manufacturing milk volumes moving to Class III processing plants are 
steady to slightly lower. Dairy operators' demand for alfalfa hay is 
light. New Mexico is between the third and fourth cutting of alfalfa 
hay. According to the DMN National Retail Report-Dairy for the week 
of July 8-14, the national weighted average advertised price for one 
gallon of milk is $2.32, up 4 cents from last week, but 49 cents 
below a year ago. The weighted average regional prices in the 
Southwest and Northwest are $2.55 and $1.99, respectively. Pacific 
Northwest milk production is steady and industry contacts say milk 
intakes are in good balance with processing needs. Only the 
occasional load of milk needs extra transportation to find a home. 
Temperatures have moderated from early summer heat and cow comfort is 
high. Some dairies are adjusting rations to lower feedstuff costs. 
Higher test hay comes with a little higher price tag and is harder to 
find. A lot of the hay made this year has some rain damage. Industry 
contacts in the mountain states of Colorado, Idaho and Utah report an 
abundance of milk. Milk production typically peaks in late June or 
early July, and this year is providing no real surprises. In Idaho, 
recent mild temperatures have helped move milk intakes to flush 
levels after a few short periods of hot weather. Most manufacturers 
have plenty of milk and excess milk is getting pushed into other 
states. A bunch of the spot loads of milk are moving into Western 
powder plants at $4 to $5 under Class IV prices. Hay is in good 
supply. Many farms are busy with second cuttings, or just starting 
third crop hay. In the West, cream availability is tight. Demand from 
ice cream manufacturers is strong. Cream volumes moving into butter 
churning are steady. However, a few processors are selling cream in 
lieu of churning. The western cream market undertone is firm. This 
week, multiples for all classes are mixed, ranging from 1.13 to 1.28. 

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