MD_DA240
DA
MD DA240 FLUID MILK AND CREAM REVIEW - WEST
Madison, WI November 17, 2016 (REPORT 46)

Farm level milk output is up in California, following seasonal 
trends. Cooler daytime temperatures in the Central Valley, averaging 
75 degrees, are relieving cow stress. This week, milk requests from 
bottlers are mixed. On one end, orders from educational institutions 
are lower as most K-12 schools will close next week. At the other 
end, Class 1 retail demands continue to be strong ahead of the 
upcoming holiday, somewhat limiting manufacturing milk supplies. 
Demands for eggnog and flavored milk are active. Some dairy operators 
are buying high quality alfalfa from nearby states since local 
supplies are tight. California is into the last cutting of alfalfa 
hay. Winter wheat planting is active throughout the state. The 
December 2016 Class 1 prices in California are $19.22 in the north 
and $19.49 in the south. The statewide average Class 1 price based on 
production is $19.23. This price is up $3.08 from the previous month 
and $0.89 higher than December 2015. Farm milk yields are increasing 
in Arizona due to the favorable climate conditions. Milk intakes are 
in good balance with manufacturing needs. Bottled milk orders from 
educational institutions are down, but up from several retail and 
food service accounts. Demand from Class II is seasonally higher. 
High quality alfalfa hay harvesting is active throughout the state. 
Milk pooled on the Arizona Order 131 totaled 404.3 million pounds in 
October 2016. Class I utilization accounted for about 27.8% of 
producer milk. The uniform price was $15.39, $0.83 below last month, 
and $1.41 below one year ago. New Mexico farm milk intakes are 
higher, in line with seasonal patterns. Class I sales are steady to 
higher as some grocery stores are restocking coolers ahead of the 
holiday shopping weekend. Sales into Class II are up. Manufacturing 
milk volumes moving into Class III are steady. New Mexico is into the 
last cutting of alfalfa hay for the current year. Milk pooled on 
Pacific Northwest Order 124 totaled 614.4 million pounds in October 
2016. Class I utilization accounted for about 27.5% of producer milk. 
The uniform price was $14.96, $0.81 below last month, and $1.32 below 
one year ago. According to the DMN National Retail Report-Dairy for 
the week of November 11-17, the national weighted average advertised 
price for one gallon of milk is $2.57. The weighted average regional 
prices in the Southwest and Northwest are $2.22 and $2.50, 
respectively. Pacific Northwestern dairy contacts report plenty of 
milk for most processing needs. Milk production is seasonally steady 
with a lot of milk moving to cheese manufacturing. Bottling demand is 
stable. Cheese manufacturers anticipate more milk to be available for 
processing runs next week due to the holiday break. Milk production in 
Idaho, Colorado and Utah is stable and in good supply. Processors are 
not having any trouble getting milk they need, and the milk is 
finding homes at nearby plants. Farmers have good supplies of 
feedstuffs for dairy herds and are happy to see some snow 
accumulating at higher elevations. Any snow that stays will help 
recharge the reservoirs used for next year's irrigation needs. 
Condensed skim interest from Class II processors remains strong. As a 
result, condensed skim volumes moving into dryers are steady to 
lower. Cream usage for cream cheese, sour cream, whipping cream, 
dips, eggnog and other popular holiday dairy products is robust. 
Cream supplies vary all over the West. Some volumes are moving to the 
Central region and Mexico. A few butter processors are opting to sell 
the cream instead of churning, as multiples remain relatively high. 
This week, multiples for all classes are slightly higher, ranging 
from 1.08 to 1.27. 


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