MD_DA240 DA MD DA240 FLUID MILK AND CREAM REVIEW - WEST Madison, WI August 18, 2016 (REPORT 33) California milk production is flat to lower as high temperatures return. Manufacturers are seeking additional loads to round out production. Demand from bottlers is strong with the beginning of school terms, but orders from restaurants and grocery stores are lagging a little behind. Class 2 demand is steady. Class 3 sales are strong with good demand from ice cream manufacturers. Milk production continues to drop in Arizona. It is hot and dry, with less monsoon activity. The high temperatures are also driving milk components lower. Class I demand is up as bottling for schools keep pulling more fluid milk to fill the seasonal increase. Ice cream demand continues to be strong. New Mexico milk production is lower, but balancing plants are busy juggling milk loads. Several manufacturing facilities that had break downs or scheduled maintenance last week resumed regular operations. Additional down days this week added to the loads of milk needing to find homes. Class I sales are up with the beginning of school terms. Sales into Class II are down slightly. Milk supplies into Class III are relatively steady. Hay production is continuing through fourth and fifth cuttings. According to the DMN National Retail Report-Dairy for the week of August 12- 18, the national weighted average advertised price for one gallon of milk is $2.49, down 5 cents from last week, but 45 cents higher than a year ago. The weighted average regional prices in the Southwest and Northwest are $2.54 and $3.49, respectively. Pacific Northwest milk production is steady to seasonally lower. The start of school terms is generating strong demand for bottling. Although some manufacturers are reaching a little further to find additional loads, milk is still readily available for most processing needs. In the mountain states of Colorado, Idaho and Utah, farm milk production is steady. Plenty of milk is available for manufacturing facilities. Some milk is moving within the region and to neighboring states at prices just above Class III. Schools opening this week are creating an increase in Class I demand. Industry contacts report good crop conditions. Feedstock supply will be solid for the remainder of the year. Western condensed skim is moving well and has a decent supply throughout most of the region. Some processors are opting to dry rather than selling additional loads. A few NDM, SMP and MPC manufacturers are taking good volumes. Cream supplies are mixed across the region. Increased school bottling has added to cream supplies and some industry contacts report cream is readily available. Other manufacturers are finding cream to be tight due to decreasing milk production and milk components. Demand for cream from ice cream and other Class II manufacturers is strong. Some butter makers are opting to sell cream as opposed to churning at full capacity. This week, multiples for all classes are steady, but a few contacts note some trending lower within the range. Multiples range from 1.16 to 1.30. 1100CT Mike.Bandli@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