MD_DA240 DA MD DA240 FLUID MILK AND CREAM REVIEW - WEST Madison, WI September 1, 2016 (REPORT 35) Farm milk production in California is steady to slightly higher. The cooler temperatures are relieving heat stress on cows. Milk volumes into manufacturing are sufficient to meet processing needs. Orders from bottlers to serve schools are higher. Requests from grocery outlets and restaurants are even this week. Many processors anticipate lower Class 1 sales during the next holiday weekend. Class 2 sales are steady. Demand for Class 3 (ice cream) is waning. Dairy operators' demand for high quality alfalfa is moderate, while supplies continue to be tight within the state. According to California Department of Food and Agriculture, July 2016 Class 1 sales in California totaled 49.7 million gallons, 5.5% below July 2015. From January through July 2016, Class 1 sales totaled 370.8 million gallons, down 3.2% from the comparable period in 2015. In Arizona, milk output is heading up as temperatures are dropping slowly. With the reopening of schools, manufacturing milk volumes are lower, but sufficient to keep local balancing plants busy. Class I sales are steady to higher in some retail channels. Many processors anticipate a drop in sales during the Labor Day holiday weekend as schools will be closed. Class II sales are steady to lower. Harvesting of good/excellent quality alfalfa hay is active around the state. Lower temperatures in New Mexico are supporting comfort of dairy cows. Therefore, the farm milk output is higher. Wet conditions are present, but only minor hauling issues are reported. Bottling sales are steady to lower, as most of the school pipelines are full. Class II sales are lower as demand for ice cream is weakening. Manufacturing milk volumes moving into Class III manufacturing plants are higher this week. Dairy operators' interest for high quality alfalfa is light as supplies are readily available. Harvesting has been delayed in some areas due to the rainy conditions. New Mexico is between the fourth and fifth cutting of alfalfa hay. According to the DMN National Retail Report-Dairy for the week of August 26-September 1, the national weighted average advertised price for one gallon of milk is $2.37, down 21 cents from last week and 14 cents lower from a year ago. The weighted average regional prices in the Southwest and Northwest are $2.17 and $2.50, respectively. Pacific Northwest milk production is steady to slightly lower but adequate for most processing needs. Manufacturers say milk intakes are following typical seasonal trends. Bottling demands from school milk programs continue to take good volumes of milk. Pasture and rangeland conditions are good or excellent in 20% of Oregon and 47% of Washington. Milk production is steady in the mountain states of Colorado, Idaho and Utah. After reaching the peak, milk output hasn't trailed off very much. Intakes are in fairly good balance with processing needs. Manufacturers report no problems getting milk, although a few contacts indicate processors are looking for a few extra spot loads of milk. Pasture and rangeland conditions are good or excellent in 66% of Colorado, 47% of Utah, and 34% of Idaho. Western condensed skim processing is steady. Supplies are slightly lower. Demands from NDM and SMP manufacturers are strong. Less condensed skim volumes are moving into ice cream processing plants. Western cream supplies are mixed throughout the region. Higher milk volumes into bottling are increasing the availability of cream for processing. Demands from butter and cream cheese makers are strong. Meanwhile, interest from ice cream manufacturers is waning. Some western cream volumes are moving to Mexico. Multiples for all classes are slightly lower, ranging from 1.18 to 1.32. 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