MD_DA240
DA
MD DA240 FLUID MILK AND CREAM REVIEW - WEST

Madison, WI December 29, 2016 (REPORT 52)

California dairy contacts note milk production is starting to 
increase along normal seasonal trends. Contacts say this is a little 
later than usual. Sales into Class 1 have been lower through the 
holiday week, but are expected to increase as bottlers ramp up before 
educational institutions resume classes. Heavy snow is building a 
good snow pack and rains are aiding recently planted forage crops. 
The precipitation is helping recharge California reservoirs, which 
now stand at 18.5 million acre-feet, 88% of normal levels. This is a 
positive sign that water may be more readily available than it has 
been through the last few years of drought. Arizona milk production 
is generally trending higher, however recent rains created some 
discomfort for cows and suppressed milk intakes a little over the 
holiday weekend. Milk handlers report plenty of milk for most 
processing needs with schools still out on holiday breaks. The 
state's alfalfa crop condition is mostly good or excellent, and 
harvesting is occurring across much of the state. In New Mexico, milk 
production continues to build and, with most schools still closed for 
winter breaks, balancing plants are working hard to juggle additional 
milk loads. System-wide holdovers peaked over last weekend. A few 
manufacturing plants weren't able to accommodate the additional 
loads, and availability of trucks and trailers further limited 
movements of milk. A few milk loads shipped outside the region in 
order to find processing homes. Seasonally strong milk production is 
continuing in the Pacific Northwest. Bottlers are diverting heavy 
milk supplies into manufactured dairy product lines as educational 
institutions take their winter holiday breaks. Industry contacts 
expect the flow of milk volumes to increase into bottling late this 
week or early next week. Milk production in the mountain states of 
Idaho, Colorado and Utah is solid. Manufacturers say they are not 
having any problems getting enough milk for their processing needs. 
During this holiday week, milk supplies are long and milk shippers 
are working hard to find homes for the excess milk. Some industry 
contacts report milk moving into the region from neighboring states 
at $3 below Class III prices. According to the DMN National Retail 
Report-Dairy for the week of December 23-29, the national weighted 
average advertised price for one gallon of milk is $2.50. The 
weighted average regional price in the Southwest is $1.99. There were 
no reported sale prices for gallon milk in the Northwest this week. 
Western condensed skim is clearing into NDM processing in good 
volumes, but demand has been relatively flat. Industry contacts say 
there is plenty of cream available. Sour cream, eggnog, and cream 
cheese production is slowing, making available cream more plentiful. 
Some butter makers are trying to absorb the excess cream through 
their churns. Multiples range from .90 to 1.20 depending on location 
and use.


1100CT 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