MD_DA240 DA MD DA240 FLUID MILK AND CREAM REVIEW - WEST Madison, WI September 15, 2016 (REPORT 37) Farm milk intakes are steady to higher in California as daytime temperatures continue dropping. Milk components are slowly improving. Manufacturers report having sufficient milk supplies for processing. Requests from bottlers have plateaued as school milk pipelines are filled. Class 1 sales to restaurants and grocery stores are slightly lower. Demand for Class 2 is steady at the customary level. Class 3 (ice cream) sales are seasonally down. Dairy operators' demand for premium/supreme quality alfalfa hay is active, but supplies are tight throughout California. The October 2016 Class 1 prices in California are $17.77 in the north and $18.04 in the south. The statewide average Class 1 price based on production is $17.79. This price is 34 cents lower than September 2016, but 41 cents higher than October 2015. In Arizona, milk production is slightly higher. The cooler morning temperatures, below 100 degrees, are supporting cows' comfort. Orders from bottlers are up as they are trying to refill some schools' pipelines. Requests from the food service and retail sectors are steady. Demands for Class II products, especially ice cream, are weakening. Milk pooled on the Arizona Order 131 totaled 362.8 million pounds in August 2016. Class I utilization accounted for about 31.0% of producer milk. The uniform price was $16.16, $0.74 above last month and $0.28 above one year ago. Milk production is even in New Mexico. Manufacturers have adequate milk supplies for most processing needs. Class I sales to retailers, food service and educational institutions are slightly down. Sales into Class II are seasonally lower. Sales to cheese processing plants are active. Dairy operators' interest for high quality alfalfa hay is light as supplies are readily available. New Mexico is into the fourth and fifth cutting of high quality alfalfa hay. According to the DMN National Retail Report-Dairy for the week of September 9-15, the national weighted average advertised price for one gallon of milk is $2.82, up 2 cents from last week and 37 cents higher from a year ago. The weighted average regional prices in the Southwest and Northwest are $2.59 and $2.08, respectively. Milk pooled on Pacific Northwest Order 124 totaled 588.4 million pounds in August 2016. Class I utilization accounted for about 27.6% of producer milk. The uniform price was $15.79, $0.60 above last month and $0.94 above one year ago. Pacific Northwest milk intakes have fallen off a bit. Milk production is mostly following typical seasonal patterns. Bottling demand is steady. Manufacturers are processing available milk easily within their own facilities with minimal need to move loads around. Milk production in the mountain states of Colorado, Idaho and Utah is steady to lower. A stretch of cooler temperatures has aided cow comfort. Manufacturers say they have little or no problem getting the milk they need for processing runs. They are able to pick up a few loads of milk to round out production from within the region. Bottling demand is steady. Single serve fluid milk sales are strong with schools, hospitals and other institutions pulling good volumes. Western condensed skim processing is steady. Many producers are opting to dry instead of selling. Interest to process NDM, SMP and MPC is strong. Ice cream/frozen desserts makers are pulling less condensed skim volumes. Cream is less tight in the West region. Bottled milk standardization is adding to cream supplies. In addition, ice cream makers are pulling less cream. Demand from butter churners is active. This week, multiples for all classes are mixed, ranging from 1.16 to 1.29. 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-home