MD_DA240
DA
MD DA240 FLUID MILK AND CREAM REVIEW - WEST

Madison, WI January 5, 2017 (REPORT 1)

California milk production appears to be steady to higher. Industry contacts 
say bottled fluid milk demand is rebounding as students return to the 
classrooms. Processors have plenty of milk for most processing needs. 
According to CDFA, November 2016 Class 1 sales in California totaled 53.6 
million gallons, down 3.2% from the previous year. From January through 
November 2016, Class 1 sales totaled 588.2 million gallons, down 2.9% from 
the comparable period in 2015. Milk production in Arizona is unchanged to 
slightly higher. Some recent rains and mud have made paddock conditions less 
comfortable for the cows, but those factors have not influenced milk 
production greatly. Industry contacts report farmers are currently 
harvesting good quantities and qualities of alfalfa. In New Mexico, milk 
production continues to increase after several stretches of colder weather. 
Holdovers are lower as bottlers and manufacturers resume normal production 
schedules following the winter holidays. Demand from both Class I and Class 
II processors is strong. Industry contacts say extra loads of milk are 
finding homes with processors in the mountain states. In the Pacific 
Northwest, milk production is generally following typical seasonal patterns. 
However, the region has experienced several rounds of cold, wet weather that 
have suppressed milk production slightly for short periods of time. As the 
temperatures warm, production rebounds. Industry contacts say the snow pack 
is above normal and that gives a promising start to 2017 irrigation 
conditions. Bottling demand has returned to pre-holiday levels as schools 
resume classes. A few dairy manufacturers are seeking out additional loads 
of milk to help rebuild inventories after the heavy holiday business. Milk 
production in the mountain states of Idaho, Colorado and Utah is solid. 
Industry contacts report additional loads of milk are coming into the region 
from neighboring states to fill up manufacturing capacity. Bottling demand, 
especially for single serve containers, is increasing as educational 
institutions return from winter breaks. Holiday snowfall has given farmers a 
good outlook for water supplies for the coming growing season. According to 
the DMN National Retail Report-Dairy for the week of December 30-January 5, 
the national weighted average advertised price for one gallon of milk is 
$2.69, up 19 cents from last week and 44 cents higher from a year ago. The 
weighted average regional price in the Southwest is $2.99. There were no 
reported prices for gallon milk in the Northwest this week. Condensed skim 
processing is ongoing, supported by heavy regional milk intakes. Movement of 
condensed skim is mostly contractual and demand varies depending on usage. 
Heavy condensed skim volumes continue clearing into dryers. Milk 
standardization is making cream more available in the West. Most of this 
cream is readily clearing into churns. However, some sour cream and aerated 
cream makers also taking some cream loads to restart production. Some dairy 
processors are choosing to churn cream instead of selling at low prices. 
Multiples for all classes are mixed, ranging from 1.00 to 1.20. 

1100CT Mike.Bandli@ams.usda.gov (608)557-7010 
Angel.teran@ams.usda.gov (608)557-7011
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-
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