MD_DA240
DA
MD DA240 FLUID MILK AND CREAM REVIEW - WEST

Madison, WI February 9, 2017 (REPORT 6)


In California, milk production at the farm level has plateaued, as 
weather has been mostly mild, similar to last week. Presently, milk 
intakes are more than suitable for manufacturing purposes. 
Consequently, balancing plants are running at full capacity, clearing 
large intakes of milk. After the Super Bowl weekend, Class 1 requests 
from retailers and food service have dipped slightly. Demand for 
Class 2 is steady this week. Overall, dairy feed supplies are 
plentiful for late winter and early spring needs. Farm milk yields in 
Arizona continue to inch up as weather conditions remain ideal for 
cows' comfort. The requests for Class I milk are steady to higher 
which is alleviating some processing pressure on plants. Some 
handlers pulled additional milk loads to cover weekly sales, but 
plant managers indicate plants within the state are running close to 
capacity. Farm milk production in New Mexico continues to be 
seasonally higher as weather is favorable for dairy herds. Due to 
operational and maintenance issues, some balancing plants are unable 
to process all their daily farm milk intakes. As a result, system-
wide holdovers remain high. Milk handlers are working with haulers to 
manage milk volumes being stored overnight and meet processing 
timelines. To avoid additional holdovers, farm milk is being cleared 
inside and outside the state to other manufacturers. Manufacturing 
milk intakes into Class I and Class III are higher this week as many 
processors are cooperating in clearing milk volumes. According to the 
National Agricultural Statistics Service, hay and roughage supplies 
are adequate. Milk production in the Pacific Northwest is following normal 
seasonal patterns. Steady bottling demand and active manufacturing are 
keeping any extra milk volumes from building beyond area plant capacities. 
Milk intakes are generally in pretty good balance with processing needs, but 
some industry contacts report getting inquiries from cheese makers within 
the region who are looking for extra milk. Unfavorable winter weather is 
creating some milk production headaches in the mountain states of Idaho, 
Colorado and Utah. The region received heavy snows and cold temperatures 
followed by some thawing, localized flooding, and mud. Industry contacts 
report some farmers are dealing with cow health issues and lameness. 
Contacts further state milk intakes are noticeably lower. Milk supplies are 
adequate for many processors, but some processors are looking for extra 
loads of milk. Western condensed skim processing is active, encouraged 
by higher seasonal farm milk output. Abundant supplies are mostly 
clearing into dryers for NDM/SMP production, albeit some intakes are 
moving into cheese processing. There is currently an oversupply of 
cream in the West region. Some of the cream is being churned into 
butter while the remaining cream is clearing at lower multiples, 
ranging .91-1.18. Most cream buyers are making bulk butter. Due to an 
unsettled cheese market, some Class III processors are pushing back 
their cream after separating. Canada has once again reentered the 
market as a buyer of U.S. cream, but Mexico has not. Mexico cream is 
readily available. According to the NASS Dairy Products report, hard 
ice cream production in the West region for December 2016 is 11.1 
million gallons, 24.9% lower than a year ago, and 4.4% lower than the 
previous month.

1100CT Angel.Teran@ams.usda.gov (608)422-8593
Mike.Bandli@ams.usda.gov (608)557-7010 
Florence.KoneGonzalez@ams.usda.gov (608)557-7012 


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