MD_DA240
DA
MD DA240 FLUID MILK AND CREAM REVIEW - WEST

Madison, WI December 15, 2016 (REPORT 50)

Although rain showers associated with the winter storm Decima are 
present in some areas of California, farm milk output continues 
improving. Milk volumes are heavy and sufficient to keep balancing 
plants busy. Most educational institutions are reducing Class 1 
requests as the upcoming holiday break is near. Bottled milk orders 
from retailers and food service are fair to good. According to some 
industry participants, rains are helping newly planted forage crops 
to germinate. Alfalfa hay is into the last cutting of the year, while 
demand from dairy operators is light. The January 2017 Class 1 prices 
in California are $18.77 in the north and $19.04 in the south. The 
statewide average Class 1 price based on production is $18.78. This 
price is down $0.45 from the previous month, but $0.88 higher than a 
year ago. In Arizona, milk production is on the raise as cooler 
temperatures continue boosting cow comfort. Milk components are 
steadily improving. Retail demand for Class I is good ahead of the 
upcoming year-end holiday needs. However, bottled milk orders from 
schools are easing gradually. Milk pooled on the Arizona Order 131 
totaled 378.1 million pounds in November 2016. Class I utilization 
accounted for about 29.7% of producer milk. The uniform price was 
$15.52, $0.13 above last month, but $1.76 below one year ago. 
Compared to the last week, milk output is steady in New Mexico. Milk 
intakes are more than sufficient to cover manufacturing needs. Also, 
some milk intakes are clearing into processing plants out of the 
state. Sales into Class I and Class II are lower this week. However, 
sales into cheese manufacturing are up. In the Pacific Northwest, 
milk production is seasonally strong. Industry contacts report plenty 
of milk is available for most processing needs. Bottling demand is 
steady to lower as educational institutions wind down prior to winter 
breaks. A lot of the milk freed up from fluid containers is finding 
its way into cheese vats. Milk production in the mountain states of 
Idaho, Colorado and Utah is robust. Cheese makers, in particular, are 
not having any trouble getting enough milk for processing. Some 
industry contacts report there are a few loads of milk available 
within the region at or slightly below Class III prices. Processing 
capacity has stayed in fairly good balance with the region's 
expansions in milk production. Milk pooled on Pacific Northwest Order 
124 totaled 556.0 million pounds in November 2016. Class I 
utilization accounted for about 29.3% of producer milk. The uniform 
price was $15.07, $0.11 above last month, but $1.61 below one year 
ago. According to the DMN National Retail Report-Dairy for the week 
of December 9-15, the national weighted average advertised price for 
one gallon of milk is $2.35. The weighted average regional prices in 
the Southwest and Northwest are $2.32 and $2.50, respectively. In the 
West, moderate to heavy intakes of condensed skim continue clearing 
into dryers. Condensed skim demand from Class II is weakening. 
Western cream is getting more available for churning as sour cream, 
eggnog, and cream cheese manufacturers finished production for the 
upcoming holiday. Multiples are steady, ranging from 1.04 to 1.24. 
Industry contacts are expecting a drop in cream premiums in the short 
term. 



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