MD_DA240 DA MD DA240 FLUID MILK AND CREAM REVIEW - WEST Madison, WI February 23, 2017 (REPORT 8) Recent heavy storms in California are causing multiples road closures and delays in farm milk deliveries. Milk output is flat this week. Cows are also uncomfortable with current weather conditions, leading to farm milk components being low. According to the California Department of Water Resources, the water content of the Sierra Nevada snowpack is 188% above normal for this time of the year. This is allowing dairy producers to safeguard enough water for the coming months. Producers anticipate more flooding in Northern California and are taking contingents measures in case there is a need to move cows along the San Joaquin River. The requests for Class 1 are mixed. In Arizona, milk output is plentiful, rapidly getting close to the seasonal flush level. The region is oversupplied with milk, and balancing plants have their dryers full to capacity, turning their milk into Class IV. Some of the milk is sent out-of-state to be processed. Bottled milk demand is steady as school pipelines are full. Milk processing into Class II is higher ahead of the upcoming Easter holiday. Milk production is higher in New Mexico this week following seasonal trends. Weather conditions are still favorable, allowing higher farm milk production and good quality output. System- wide holdovers remain high throughout the state due to repair and maintenance matters. Manufacturers do not have enough capacity to process all their milk intakes. Therefore, they continue clearing some of their stocks to Colorado and Texas to meet processing needs. Sales into Class I are slightly down, but up into Class II. Pacific Northwest milk production is following seasonal patterns. Farmers in some areas are still dealing with wet conditions, but milk intakes are generally in good balance with processing needs. Bottling demand is steady. Manufacturers are clearing good volumes of milk through processing facilities. Milk production conditions are gradually improving in the mountain states of Idaho, Utah and Colorado. However, parts of Idaho are still facing considerable challenges brought on by flooding. Lots of water from rapid snow melt, following cold temperatures, had no way to soak into the frozen ground. Streams and canals overflowed and water quickly backed up into low areas. Dairy farms close to the canal systems were hardest hit. A number of dairy farms were forced to either temporarily relocate, or deal with the flooded and muddy paddocks as best they could. Industry contacts say cull rates are rising and many hospital barns are full. In addition, hay stacks and silage piles that were flooded are significantly degraded and may not be useable. Milk production has decreased within the state. Some milk is moving from Class IV facilities to Class III facilities. There are also a few loads of milk and condensed skim milk coming in from Midwestern and Southwestern states to keep cheese plants at capacity. According to the DMN National Retail Report-Dairy for the week of February 17-23, the national weighted average advertised price for one gallon of milk is $2.62, down 23 cents from last week but 25 cents higher from a year ago. The weighted average regional price in the Southwest is $3.03, with a price range of $2.50-$3.28. The weighted average regional price in the Northwest is $1.89, with no price range. Condensed skim milk volumes are clearing into dryers for NDM and skim milk powder processing. Some manufacturers are pulling more volumes from the Midwest to the West. Cream supplies are plentiful in the region. Some processors are churning cream into butter. The demand from ice cream and cream cheese makers remains strong as Easter holidays are getting close. Cream multiples are .98-1.20. The NASS Milk Production report noted January 2017 milk production in the 23 selected states was 17 billion pounds, 2.7% above a year ago. Milk cows in the 23 selected states totaled 8.69 million head, 67,000 head more than a year ago. The following table shows western states included in the report and the monthly milk production changes compared to a year ago: January 2017 Milk Production, (USDA-NASS) (Million Lb.) % Change From 1 Year Ago Arizona 414 + 0.7 California 3,413 - 0.6 Colorado 341 + 6.6 Idaho 1,191 + 1.0 New Mexico 679 + 15.3 Oregon 211 - 2.8 Utah 177 + 2.3 Washington 553 - 0.4 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