MD_DA240
DA
MD DA240 FLUID MILK AND CREAM REVIEW - WEST

Madison, WI February 16, 2017 (REPORT 7)

California is experiencing some scattered showers that kept the 
production of farm milk at a steady level. Northern California is 
still experiencing rain, whereas Southern California has some sun and 
winds to help it dry out. Dairy industries in California expect to 
have more water for livestock throughout the year because of the rain 
received over the last few weeks. Milk quality has slightly decreased 
due to muddy conditions in some dairy farms. There is enough milk for 
manufacturing needs. The demand for Class 1 is up this week. 
According to CDFA, March 2017 Class 1 prices in California are $18.62 
in the north and $18.89 in the south. The statewide average Class 1 
price based on production is $18.63. This price is up $0.48 from the 
previous month, and $3.23 higher than a year ago. Milk yields are 
increasing in the state of Arizona, reaching high volumes. 
Manufacturers are receiving heavy milk intakes, resulting in driers 
running at full capacity. They are looking for out-of-state 
manufacturers to take the supplies they cannot process. Some plant 
managers do not have enough capacity to dry their milk. Therefore, 
they are turning their milk into liquid condensed buttermilk and 
sending it to processors in California to dry it. Milk is also 
clearing into Class III and Class IV. Many dairy industry leaders are 
expecting milk production to peak by the end of March. Harvesting of 
good to excellent alfalfa hay is active throughout Arizona. Milk 
pooled on the Arizona Order 131 totaled 460.3 million pounds in 
January 2017. Class I utilization accounted for about 24.9% of 
producer milk. The uniform price was $17.36, up $0.56 from last month 
and $2.86 above one year ago. Milk production continues to be higher 
in New Mexico as temperatures remains favorable to cow living 
conditions. Due to plant maintenance and repair projects, milk 
volumes are building up from day to day. With the number of loaded 
trailers being high, some handlers are working with haulers to 
identify all available equipment to continue milk pickups. Some of 
the milk is clearing out of state to Colorado and Texas. A few cheese 
manufacturers are running at full capacity and struggling to hit 
orders. The sales into Classes I and III are higher, whereas the 
sales into Class II are lower. Class IV sales are flat. Pacific 
Northwest milk intakes are in good balance with processing needs. 
Although the region has had some heavy snows and localized flooding, 
milk production is following seasonal patterns. Bottling demand is 
steady. Manufacturers are taking good volumes of available milk. Milk 
handlers say they are getting inquiries from manufacturers in 
neighboring states that are looking for extra loads of milk. Moving 
the milk has proven more difficult due to heavy snows along some 
routes. Milk pooled on Pacific Northwest Order 124 totaled 604.0 
million pounds in January 2017. Class I utilization accounted for 
about 27.9% of producer milk. The uniform price was $17.03, up $0.66 
from last month and $2.88 above one year ago. In the mountain states 
of Idaho, Colorado and Utah, dairymen are still contending with the 
lingering effects of recent cold, wet weather. Mud and flooding have 
challenged dairy farmers with maintaining cow cleanliness and milk 
quality. Milk production has been suppressed somewhat. Processors 
report milk supplies are adequate for most processing needs, but some 
processors are looking outside the region for available loads of 
milk. According to the DMN National Retail Report-Dairy for the week 
of February 10-16, the national weighted average advertised price for 
one gallon of milk is $2.85, up 17 cents from last week and 52 cents 
higher from a year ago. The weighted average regional price in the 
Southwest is $2.38, with a price range of $1.99-$2.99. The weighted 
average regional price in the Northwest is $2.56, with a price range 
of $1.89-$3.49. In the West, condensed skim supplies are abundant 
with some intakes moving into cheese plants. However, most of these 
condensed skim volumes are clearing into balancing plants' dryers. 
The market is flooded with cream in the West. However, some cream 
cheese makers are starting to pull some cream ahead of the spring 
holidays' needs. Most manufacturers are churning their cream into 
butter, but could not process all cream. As a result, the remaining 
supplies are clearing to other regions at lower prices. Cream demand 
is weak this week. Multiples are slightly higher, ranging .98-1.20. 


1100CT Florence.KoneGonzalez@ams.usda.gov (608)557-7012 
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