MD_DA240
DA
MD DA240 FLUID MILK AND CREAM REVIEW - WEST
Madison, WI August 4, 2016 (REPORT 31)
Farm level milk production is trending lower in California. Daytime 
temperatures are reaching 109 degrees in the Central Valley. Consequently, 
cows' stress is increasing. However, manufacturers report having enough milk 
supplies to cover current production needs. Orders from bottlers are 
steadily improving as most educational institutions are reopening in the 
next few weeks. Bottled milk requests from retailers and food service are 
steady. Demands for ice cream and frozen desserts are strong, which is usual 
for this time of the year. Condensed skim volumes moving into Class 
4a(butter/powder)and Class 4b(cheese)are steady. Dairy operators' demand for 
high quality alfalfa hay is moderate to high, but supplies are tight. 
Therefore, many dairy operators are buying alfalfa from nearby states. The 
July 4a price (butter/powder) in California is $14.23, up 72 cents from the 
previous month and $1.20 higher from a year ago. This compares to the 
Federal Order Class IV price of $14.84 for July. The July 4b price (cheese) 
is $14.67, up $1.64 from the previous month, but 31 cents below a year ago. 
This compares to the Federal Order Class III price for July at $15.24. The 
monsoon activity and high humidity are negatively affecting milk yields in 
Arizona. A few hauling issues have been reported due to flooding along 
highways. Class I orders from educational institutions are ramping up as 
most K-12 schools are reopening this week. Requests from retailers are 
higher as some supermarkets are restocking shelves. Class I sales into 
restaurants are even this week. Demands for various Class II dairy products 
are fair to good. Moderate condensed skim volumes continue moving into NDM 
processing. The rains have delayed alfalfa hay harvesting in some areas of 
the state. In New Mexico, the warm and rainy weather conditions are dropping 
farm milk intakes. Sales into Class I balancing plants are steady. Bottled 
milk demands from retailers and food service are even this week. However, 
many processors are anticipating higher Class I sales as K-12 schools are 
reopening soon. Class II sales are higher as interest for ice cream is 
strong. Condensed skim demand from NDM manufacturers is active. According to 
the DMN National Retail Report-Dairy for the week of July 29-August 4, the 
national weighted average advertised price for one gallon of milk is $2.66, 
up 25 cents from last week and 30 cents higher from a year ago. The weighted 
average regional prices in the Southwest and Northwest are $2.34 and $2.10, 
respectively. Pacific Northwest dairies have experienced a stretch of 
relatively good milk production weather. With the occasional touch of summer 
heat, milk production is steady to lower and following typical seasonal 
trends. Sufficient supplies of milk are available for most processing needs. 
Bottling demand is stable, but processors are anticipating the start of 
school terms over the next few weeks will increase bottling draws. Feed 
supplies are adequate. Pasture and rangeland conditions are good or 
excellent in 34% of Oregon, and 63% of Washington. Milk production is stable 
in the mountain states of Colorado, Idaho and Utah. Recent higher 
temperatures may have taken milk intakes down a notch, but there is still 
plenty of milk for most processing needs. Industry contacts report milk 
receipts are in pretty good balance with processing needs. Although a few 
loads of milk are being shipped into other western states, extra milk is 
mostly finding homes at nearby facilities. Hay making is ongoing and 
feedstocks are in good supply. Pasture and rangeland conditions are good or 
excellent in 66% of Colorado, 56% of Idaho, and 55% of Utah. Western cream 
supplies continue to narrow. Cream volumes moving into butter churning are 
steady. However, ice cream makers continue pulling significant amounts of 
cream. The market undertone is firm. This week, multiples for all classes 
are higher, ranging from 1.16 to 1.30. 



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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