MD_DA240 DA MD DA240 FLUID MILK AND CREAM REVIEW - WEST Madison, WI February 2, 2017 (REPORT 5) After several days of rain, mild climate is back in California, stimulating higher milk yields. Milk intakes for manufacturing needs are more than adequate. Milk components remain high. Class 1 requests from several groceries stores and restaurants are up this week. Class 2 demand is steady. Due to recent rains, the drought in California has been noticeable reduced. Many dairy operators are optimistic about water availability for the upcoming spring/summer seasons, as the water level at several reservoirs has improved. In addition, the snowpack across Sierra Nevada is above normal, which is favorable for the upcoming corn and alfalfa crop season. According to CDFA, December 2016 Class 1 sales in California totaled 54.3 million gallons, down 4.4% from the previous year. From January through December 2016, Class 1 sales totaled 642.5 million gallons, down 3.1% from the comparable period in 2015. Farm milk output in Arizona continues inching up due to cooler temperatures. Milk intakes are in balance with processing needs. Bottled milk demands from several schools, fast food restaurants, and supermarkets are fair to good this week. Alfalfa hay harvesting is active throughout the state. In New Mexico, milk production is up mainly due to the comfortable climate for dairy herds. There is more than sufficient milk for processing demands. As a result, processors from other regions of the country are helping clear heavy milk supplies. Class I sales are higher, as some retailers are restocking shelves. Bottled milk requests from restaurants are steady. Sales into Class II are up, but are steady into Class III. Pacific Northwest milk production is stable and balanced. Milk is moving to bottling facilities at normal seasonal levels. In addition, dairy product manufacturers report adequate milk supplies for most processing needs. This winter has been colder than normal, but with above average snowfall, farmers expect good amounts of water for irrigation needs next growing season. Industry contacts report feedstocks are in good supply. Milk production in the mountain states of Idaho, Colorado and Utah is seasonally steady. Some contacts report this winter has been a little more difficult than most. Heavy snows and colder temperatures have suppressed milk production somewhat and made milk pickups a little more difficult. However, most of the region's milk is finding a home within the region. Manufacturers report there is no problem getting the milk needed for most processing needs. Feedstocks are in good supply and the excellent snow pack is giving farmers confidence of adequate water for irrigation needs in the coming year. According to the DMN National Retail Report-Dairy for the week of January 27 to February 2, the national weighted average advertised price for one gallon of milk is $2.55, up 16 cents from last week and 30 cents higher from a year ago. The weighted average regional price in the Southwest is $2.41, with a price range of 1.99-2.69. The weighted average regional price in the Northwest is $1.89, with no range. In the West, heavy condensed skim volumes continue clearing into dryers for NDM/SMP production. Condensed skim demand from cheese makers for cheese fortification is fair to good. Manufacturing of cream based products related to the Super Bowl has been finished, shipped, and delivered. Butter makers continue clearing heavy cream intakes into churns. Demand for spot cream loads is light. Cream supplies are readily available throughout the West region. Thus, multiples for all classes are slightly lower, ranging from .97 to 1.19. 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