MD_DA240 DA MD DA240 FLUID MILK AND CREAM REVIEW - WEST Madison, WI August 25, 2016 (REPORT 34) In California, many dairy operators are seeing a slight uptick on milk yields. However, the butterfat component in the milk continues to be low. Sales into Class 1 balancing plants are up as bottlers are filling many K-12 pipelines. Interest for Class 2 is stable at customary levels. Orders from retailers and food service are steady. Manufacturing milk demand from Class 3 (ice cream) makers is active, but is less strong compared to a month ago. Demand for alfalfa hay is moderate, but supplies are tight. Many dairy operators continue importing good to high quality alfalfa hay from nearby states. According to California Department of Food and Agriculture, July 2016 pool receipts of milk in the state total 3.23 billion pounds. This is 1.3% lower compared to the same month a year ago. From January through July 2016, receipts are 2.4% lower from the comparable period in 2015. The Value at Test price is $14.82, $1.02 higher than the previous month, but $0.13 lower from a year ago. The percentage of receipts used in Class 1 products is 12.49%. The July quota price is $15.66 and the over quota price is $13.96. These prices are $1.04 higher than June 2016, but $0.36 below a year ago. Milk production is lower in Arizona. Although the effects of monsoon season are less active, temperatures remain high at 110 degrees. Manufacturers report having enough milk supplies to cover current production needs. Class I orders from educational institutions are even as pipelines have been filled. Requests from the retail sector are up as some grocery stores are restocking shelves. Bottled milk sales into restaurants are even this week. Interest for ice cream is active. Good/excellent alfalfa hay harvesting continues across the state. In New Mexico farm milk output is slightly lower this week. Some sporadic rain showers are unsettling cows' comfort. Botted milk sales into educational institutions are up. Class I milk demands from retailers and food service are mostly steady. Class II sales are slightly down as interest for ice cream is somewhat less active. Manufacturing milk volumes moving into cheese processing facilities are flat. Demand for alfalfa hay from dairy operators is light, supplies are readily available. New Mexico is between the fourth and fifth cuttings of good to excellent alfalfa hay. According to the DMN National Retail Report- Dairy for the week of August 19-25, the national weighted average advertised price for one gallon of milk is $2.58, up 9 cents from last week and one cent higher than a year ago. The weighted average regional price in the Southwest is $2.18. Pacific Northwest milk production is steady and following typical seasonal trends. Recent hot spells have suppressed milk production a little, but intakes rebound as temperatures moderate. Good volumes of milk continue to flow into bottling for school milk programs. Manufacturers have adequate supplies of milk for most processing needs. Milk production is steady in the mountain states of Colorado, Idaho and Utah. Bottling draws for schools are taking heavier volumes of milk. Some processors are looking for a little extra milk to fill up manufacturing schedules. Intakes are in good balance with processing needs and most milk is staying within the region. Demand for western condensed skim from NDM processors is strong. Condensed skim supplies are steady to lower throughout the region. Some processors are opting to dry instead of selling in the spot market. In the West region, butter churners are pulling more cream volumes ahead of Q4 production needs. Some butter makers are starting to run operations at full capacity. Also, sales to ice cream manufacturers are active, but are less intense compared to the previous month. This week, multiples for all classes are higher, ranging from 1.19 to 1.33. The NASS Milk Production report noted July 2016 milk production in the 23 selected states was 16.8 billion pounds, 1.4% above a year ago. Milk cows in the 23 selected states totaled 8.65 million head, 19,000 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: July 2016 Milk Production, (USDA-NASS) (Million Lb.) % Change From 1 Year Ago Arizona 392 + 1.3 California 3,377 - 0.8 Colorado 336 + 4.3 Idaho 1,273 + 3.7 New Mexico 651 - 1.2 Oregon 219 + 2.8 Utah 183 - 5.2 Washington 560 ... 1100CT Angel.Teran@ams.usda.gov 608-557-7010 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