MD_DA240
DA
MD DA240 FLUID MILK AND CREAM REVIEW - WEST
Madison, WI August 11, 2016 (REPORT 32)
Milk production has plateaued in California as daytime temperatures 
are lower compared to the previous week. Some dairy operators are 
drying off cows, which is usual during this time of the year. 
Manufacturers report having sufficient milk supplies to process any 
type of dairy products. Requests from bottlers are strong as K-12 
schools are reopening during next week. Class 1 sales to supermarkets 
and restaurants are slightly lower. Demand for Class 2 is steady at 
the customary level. Class 3 (ice cream) sales are seasonally up. 
Dairy operators continue buying premium/supreme quality alfalfa hay 
from nearby states. The September 2016 Class 1 prices in California 
are $18.12 in the north and $18.39 in the south. The statewide 
average Class 1 price based on production is $18.13. This price is 
$1.75 higher than August 2016 and $0.04 higher than a year ago. The 
monsoon activity continues in Arizona. The higher temperatures, 
around 112 degrees, combined with high humidity are dropping farm 
milk intakes. Orders from bottlers are up as they are trying to fill 
school pipelines. Requests from the retail and food service sectors 
are steady this week. Demands for Class II products, especially ice 
cream, are strong. Wet conditions are present in New Mexico and are 
taking a toll on cows' comfort. Therefore, farm milk production is 
lower this week. However, manufacturing milk volumes are enough to 
keep balancing plants busy. Class I sales are up as K-12 schools are 
restarting terms during next week. Orders from retailers and food 
service are lower. Sales into Class II are slightly down. 
Manufacturing milk intakes moving into Class III are steady. New 
Mexico is into the fourth cutting of good/excellent quality alfalfa 
hay. According to the DMN National Retail Report-Dairy for the week 
of August 5-11, the national weighted average advertised price for 
one gallon of milk is $2.54, down 12 cents from last week, but 4 
cents higher from a year ago. The weighted average regional prices in 
the Southwest and Northwest are $2.48 and $2.79, respectively. 
Temperatures in the Pacific Northwest are rising. Therefore, milk 
output is slightly lower this week. Bottled milk requests are 
improving as school terms will start over the next few weeks. 
Interest for Class II is stable. In the mountain states of Colorado, 
Idaho and Utah, farm milk production is steady. Manufacturing milk 
volumes are sufficient to cover most processing needs. Milk surplus 
loads are finding homes in balancing plants from nearby states. Class 
I demand is inching up as schools are reopening soon. Interest for 
Class II is active. Regional pasture and rangeland conditions are 
good to excellent. Western condensed skim processing is trending 
lower. Prices are relatively low according to some industry 
participants. Many processors are opting to dry instead of selling. 
Demands from NDM, SMP and MPC manufacturers are fair to good, but 
light from ice cream/frozen desserts processors. In the West, milk 
standardization, due to the reopening of many schools, is marginally 
adding to cream supplies. However, cream is mostly tight throughout 
the region. Butter churning is steady. Demands from ice cream and 
cream cheese makers are strong. The western cream market tone is 
firm. This week, multiples for all classes are unchanged, ranging 
from 1.16 to 1.30. 
DAIRY PRODUCTS:  According to NASS, hard ice cream production in the 
West region for June 2016 is 19.2 million gallons, up 2.4% from a 
year ago and 0.3% higher than the previous month. 


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