MD_DA240
DA
MD DA240 FLUID MILK AND CREAM REVIEW - WEST

Madison, WI January 19, 2017 (REPORT 3)

Due to the current wet conditions, muddy dairy paddocks have slightly 
suppressed milk yields in California. However, milk intakes are 
adequate for processing needs. Class 1 demand from educational 
institutions is steady as most school pipelines are full. Interest 
for Class 2 is improving, but slowly. The Sierra Nevada snowpack is 
well above normal. Therefore, some dairy operators expect sufficient 
water for the upcoming growing season. Alfalfa hay fieldwork remains 
dormant throughout the state. In Arizona, milk production is up, 
following seasonal patterns. Cooler daytime temperatures are 
supporting cows' comfort. Demand for Class I and Class II are steady 
this week. Alfalfa hay harvesting is active throughout the state. 
Milk pooled on the Arizona Order 131 totaled 408.3 million pounds in 
December 2016. Class I utilization accounted for about 27.1% of 
producer milk. The uniform price was $16.80, up $1.28 from last month 
and $0.56 above one year ago. Milk output is slightly down in New 
Mexico as the current wintry climate is boosting stress on cows. 
Nevertheless, manufacturing milk intakes are more than adequate. Some 
processors from nearby states are helping to clear heavy milk 
volumes. Bottled milk requests from retailers are up as some grocery 
stores are restocking shelves. Class I demand from food service is 
steady. Sales into Class II and Class III are slightly higher as the 
Super Bowl approaches. In the Pacific Northwest, last week's winter 
storms dumped heavy snows and rain in parts of the region. The storms 
caused delays in transportation and deliveries of milk to some dairy 
facilities. In addition, the cold, wet weather suppressed milk 
production somewhat. Although transportation and deliveries have 
returned to normal, continued periods of rain, ice or snow through 
the end of the week are less than ideal for providing good cow 
comfort. Bottling demand is steady and adequate milk is available for 
most processing needs. In the mountain states of Idaho, Colorado and 
Utah, more snow is expected to add to the snowpack that is ahead of 
average amounts. The precipitation is a positive sign that adequate 
irrigation water may be available for the growing season. However, 
the cold, wet conditions are reducing cow comfort and subduing milk 
production a bit. At this point, manufacturers are not very concerned 
because milk intakes appear to be in pretty good balance with 
processing needs. Milk pooled on Pacific Northwest Order 124 totaled 
579.7 million pounds in December 2016. Class I utilization accounted 
for about 29.0% of producer milk. The uniform price was $16.37, up 
$1.30 from last month and $0.69 above one year ago. According to the 
DMN National Retail Report-Dairy for the week of January 13-19, the 
national weighted average advertised price for one gallon of milk is 
$3.06, up 32 cents from last week and 44 cents higher from a year 
ago. The weighted average regional price in the Southwest and 
Northwest are $2.74 and $1.79, respectively. In the West, moderate to 
heavy condensed skim intakes continue clearing into dryers. Demand 
from ice cream makers is gradually improving. Western cream supplies 
are readily available. The competition for cream between butter 
churners and Class II (Class 2) processors is expected to increase in 
the next few weeks as the Super Bowl approaches. Therefore, an uptick 
in cream premiums is also anticipated. This week, multiples for all 
classes are mixed, ranging from 1.00 to 1.17. 


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