MD_DA240 DA MD DA240 FLUID MILK AND CREAM REVIEW - WEST Madison, WI July 28, 2016 (REPORT 30) In California, the high daytime temperatures are raising heat stress on dairy cows. Consequently, milk yields are lower this week. However, milk volumes are sufficient to process any type of dairy product. Bottled milk sales to the retail sector are slightly up this week. Orders from restaurants are steady. Buyers' interest for flavored milk is active. Demand for Class 2 is even. Sales into Class 3 (ice cream/frozen desserts) continue trending up. Moderate to heavy condensed skim loads are moving into NDM and SMP manufacturing. According to California Department of Food and Agriculture (CDFA), June 2016 pool receipts of milk in the state total 3.21 billion pounds. This is 1.3% lower compared to the same month a year ago. From January through June 2016, receipts are 2.5% lower from the comparable period in 2015. The Value at Test price is $13.80, $0.96 higher than the previous month, but $1.56 lower from a year ago. The percentage of receipts used in Class 1 products is 12.62%. The June quota price is $14.62 and the over quota price is $12.92. These prices are $0.99 higher than May 2016, but $1.72 below a year ago. CDFA noted June 2016 Class 1 sales in California totaled 50.2 million gallons, 2.3% lower than last year. From January through June 2016, Class 1 sales totaled 321.1 million gallons, down 2.8% from the comparable period in 2015. Farm milk production is trending lower in Arizona. The hot weather and high humidity are taking a toll on dairy cows' comfort. Some balancing plants are helping to clear milk surpluses from nearby states. Bottled milk orders from retailers and food service are steady. However, according to some processors, requests for Class I will increase very soon as most public K-12 schools will reopen during the second week of August. Demand for Class II is seasonally strong. Condensed skim sales into NDM and ice cream production are steady this week. Milk production is lower in New Mexico due to the warmer climate. Class I sales are slightly up this week. Sales into Class II are lower. Significant milk loads are moving to the Southeast region, which is typical for this time of year. Manufacturing milk volumes moving into cheese processing facilities are higher. Condensed skim sales to Class IV (butter/powder) manufacturers have been irregular throughout the week as some processing plants have repair/maintenance work. Dairy operators' demand for alfalfa hay is light. New Mexico is between the third and fourth cutting of high quality alfalfa hay. According to the DMN National Retail Report-Dairy for the week of July 22-28, the national weighted average advertised price for one gallon of milk is $2.41, down 31 cents from last week and 8 cents below a year ago. The weighted average regional price in the Southwest is $2.23. In the Pacific Northwest, temperatures are conductive to dairy herds' comfort. Milk production is seasonally up. Manufacturing volumes are sufficient to keep balancing plants busy. Class I demands from restaurants and grocery stores are steady. However, processors are expecting an increase in orders as educational institutions will restart in the next few weeks. In the mountain states of Colorado, Idaho and Utah, farm milk yields are higher. Some processing plants from nearby states are helping to clear heavy milk volumes. Bottled milk demand is seasonally lower. In the western region, cream supplies are tight in many processing plants. Demands from ice/cream and cream cheese manufacturers are strong. Moderated cream loads continue moving into butter churning. Regional butter processing is ongoing. Some western cream loads are moving to Mexico. The market undertone is firm. This week, multiples for all classes are mixed, ranging from 1.13 to 1.28. The NASS Milk Production report noted June 2016 milk production in the 23 selected states was 16.7 billion pounds, 1.6% above a year ago. Milk cows in the 23 selected states totaled 8.65 million head, 17,000 head more than a year ago. The following table shows western states included in the report and the monthly milk production changes compared to a year ago: June 2016 Milk Production, (USDA-NASS) (Million Lb.) % Change From 1 Year Ago Arizona 410 + 2.8 California 3,363 - 1.0 Colorado 317 + 2.3 Idaho 1,223 + 2.3 New Mexico 634 - 3.5 Oregon 219 + 1.9 Utah 179 - 6.3 Washington 553 ... 1100CT Angel.Teran@ams.usda.gov 608-557-7011 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