MD_DA240
DA
MD DA240 FLUID MILK AND CREAM REVIEW - WEST

Madison, WI December 8, 2016 (REPORT 49)

In North California, milk output is uneven due to the unfavorable 
weather conditions. On the other hand, the mild climate is sustaining 
higher milk yields in Southern California. Regardless of weather 
conditions, milk components are high, near or at the top of the 
season. Class 1 demand from groceries stores and food service are 
active. Sales into Class 2 are up, sustained by the strong demand 
related to the year-end holiday. Lower temperatures and humidity are 
boosting milk production in Arizona. Farm milk output is very close 
to the seasonal flush. Fluid milk sales into Class I are steady to 
higher as some schools and retail channels are filling pipelines. 
Milk sales into Class II are higher ahead of the upcoming holiday. 
The cooler winter climate in New Mexico is starting to take a toll on 
cow comfort. Some producers notice a slight drop in milk production. 
However, there enough milk intakes to keep balancing plants busy. 
Sales into Class I are lower, but steady into Class II. Manufacturing 
milk volumes moving into Class III are slightly lower as some cheese 
plants are having repair/maintenance works this week. Pacific 
Northwest milk production is following typical seasonal patterns. 
Although the region has experienced wet and chilly weather, cow 
comfort has not been impacted greatly. Manufacturers report milk 
intakes are in line with expectations and adequate for most 
processing needs. Bottling demand is steady. Industry contacts in the 
mountain states of Idaho, Colorado and Utah say the favorable amount 
and quality of feedstuffs are contributing to solid milk production 
within the region. Milk intakes are in good balance with processing 
needs. Manufacturers are not having any trouble getting the milk they 
need. Bottling demand is active in these few weeks prior to an 
expected slowdown during the holidays. According to the DMN National 
Retail Report-Dairy for the week of December 2-8, the national 
weighted average advertised price for one gallon of milk is $2.46. 
The weighted average regional prices in the Southwest and Northwest 
are $2.33 and $1.99, respectively. In the West, interest for 
condensed skim remains strong, as year-end holidays get close. 
However, supplies are heavily committed in order to cover contractual 
needs. At this point, some manufacturers are pulling less cream 
volumes in the West. However, demand from butter and cream cheese 
makers remains strong, mainly sustained by the year-end holidays 
needs. Cream supplies are more available in the region. Consequently, 
multiples are slightly down, ranging from 1.04 to 1.24. Many industry 
participants anticipate a decline in cream premiums in the next few 
days, as most Class II and butter processors are wrapping up 
production related with the year-end holiday. According to the NASS 
Dairy Products report, hard ice cream production in the West region 
for October 2016 is 12.9 million gallons, 22.8% lower than a year 
ago, and 13.3% lower than the previous month. 



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