MD_DA240 DA MD DA240 FLUID MILK AND CREAM REVIEW - WEST Madison, WI October 27, 2016 (REPORT 43) Milk production is uneven in California. Milk yields are slightly lower in Northern California due to the wet weather. However, milk output is seasonally higher in Southern California as the good climate has been conductive to cow comfort. Milk volumes are in balance with processing needs. There is a strong demand for milk from Class 2 manufacturers ahead of the year-end holidays. Class 1 sales to grocery stores are up. Bottled milk requests from schools and food service are even this week. Cotton and alfalfa harvesting is active throughout the state. According to California Department of Food and Agriculture (CDFA), September 2016 pool receipts of milk in the state total 3.02 billion pounds. This is 0.9% lower compared to the same month a year ago. From January through September 2016, receipts are 2.2% lower from the comparable period in 2015. The Value at Test price is $15.85, $0.14 lower than the previous month and $0.15 lower from a year ago. The percentage of receipts used in Class 1 products is 14.96%. The September quota price is $16.34 and the over quota price is $14.64. These prices are $0.40 lower than August 2016 and $0.34 below a year ago. According to CDFA, September 2016 Class 1 sales in California totaled 54.2 million gallons, down 1.7% from the previous year. From January through September 2016, Class 1 sales totaled 479.6 million gallons, down 2.6% from the comparable period in 2015. In Arizona, milk output is trending higher. Milk components continue improving. Milk intakes are in good balance with current processing needs. Class I sales to retailers and restaurants are up. Bottled milk orders from educational institutions are improving, too. Demand for Class II is strong as the Q4 holidays approach. In New Mexico, milk yields are higher as cooler temperatures are boosting cow comfort. Class I sales are up as some grocery stores are restocking shelves. Class II sales are lower. Class III processors are demanding higher milk volumes this week. New Mexico is between the fifth and sixth cutting of alfalfa hay. According to the DMN National Retail Report-Dairy for the week of October 21-27, the national weighted average advertised price for one gallon of milk is $2.99. The weighted average regional prices in the Southwest and Northwest are $2.19 and $2.69, respectively. Milk production in the Pacific Northwest is following typical seasonal patterns. It is nearing the bottom of the annual cycle, but manufacturers report having adequate supplies for most processing needs. Bottling demand is steady, with many of the school food pipelines filled. Pasture and rangeland condition is good or excellent in 25% of Oregon and 48% of Washington. In the mountain states of Colorado, Utah and Idaho, milk production is easing back along seasonal patterns. Manufacturers report their milk is in good supply and adequate to meet most processing needs. A few processors would take a few extra loads of milk if available, but much of the extra milk is getting used close to home. Bottlers say their fluid milk products have strong sales for the time of year. Pasture and rangeland condition is good or excellent in 54% of Colorado, 41% of Utah and 47% of Idaho. Condensed skim is readily available in the West region. Moderate to heavy volumes continue clearing into NDM and SMP manufacturing. Western cream demand from Class II/III processors is strong as sour cream and cream cheese production is ramping up ahead of the year-end holidays. Butter churners continue pulling heavy cream supplies. However, demand from ice cream makers is weak. This week, multiples for all classes are mixed, ranging from 1.02 to 1.23. The NASS Milk Production report noted September 2016 milk production in the 23 selected states was 16.0 billion pounds, 2.3% above a year ago. Milk cows in the 23 selected states totaled 8.67 million head, 36,000 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: September 2016 Milk Production, (USDA-NASS) (Million Lb.) % Change From 1 Year Ago Arizona 354 + 1.1 California 3,170 - 0.1 Colorado 325 + 4.5 Idaho 1,228 + 4.9 New Mexico 625 - 1.3 Oregon 210 - 0.5 Utah 174 - 3.3 Washington 543 + 1.3 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