MD_DA240
DA
MD DA240 FLUID MILK AND CREAM REVIEW - WEST

**REVISED AFTER SENDING

Madison, WI May 4, 2017 (REPORT 18)

In California, farm milk production is currently steady. However, it is 
expected to drop in a few days, as the weather gets warmer. With 
temperatures reaching 100 degrees, the supplies of quality alfalfa hay are 
also dropping. Some industry contacts report that California reached the 
peak of its spring flush last week. Processors' intakes into Class 1 are 
steady. Class 3 intakes are increasing as many manufacturers are actively 
making ice cream and other frozen products in preparation for the upcoming 
summer. In Arizona, milk output is dropping slowly because of recent weather 
conditions. Milk pulls from schools are steady this week. However, it is 
expected to be lower in the next two weeks with public schools getting ready 
to end their classes for the summer break. Milk going into nonfat dry milk 
and skim milk powder is higher in some areas. Milk intakes into Classes III 
and II are increasing. In New Mexico, milk production is slightly down this 
week. Blizzard conditions in Kansas caused milk delivery delays in some New 
Mexican plants. In addition, power outages combined with snow in some 
states, resulted in less milk intakes for a number of New Mexican 
manufacturers. Less milk was available for a handful of Class I plants at 
the beginning of the week, but dairy activities are currently getting back 
to normal. Milk requests for ice cream and frozen yogurt manufacturing 
increased slightly in view of the approaching summer. Pacific Northwest milk 
production is steady to higher. Bottling demand is steady. Milk is plentiful 
for most processing needs. Manufacturers note facilities are running at or 
near full capacity to handle the available milk. Milk production in the 
mountain states of Idaho, Utah and Colorado is heavy. In some parts of the 
region, industry contacts suggest milk production may have reached the peak. 
In other parts of the region, the typical peak is normally sometime in June. 
Regardless, industry contacts say there a lot of milk to process or move. 
Much of the milk is finding a home within the region, with only a few loads 
leaving or coming into the mountain states. The ample milk intakes, although 
expected, are placing pressure on manufacturers who are running facilities 
at or near capacity. Demand for condensed skim is higher in some parts of 
the West, especially in California. In Arizona, sales have been somewhat 
flat. In California, cream prices are on the rise and inventories are tight 
to comfortable. In the Western region, some processors are limiting their 
purchase of cream as they have sufficient stocks. Cream inventories remain 
plentiful throughout the region; however, new sales are harder to develop. 
Cream is moving well within contracts. Some industry contacts report selling 
a few loads in the spot market. A few retailers are able to move some cream 
from California to Idaho and Iowa. A number of processors have stopped 
butter churning last week, but are thinking about churning this week if 
cream volumes further increase. Cream multiples this week are **1.08-1.18. 
According to the DMN National Retail Report-Dairy for the week of April 28-
May 04, the national weighted average advertised price for one gallon of 
milk is $2.36, down $0.08 from last week, but $0.24 higher from a year ago. 
The weighted average regional price in the Southwest is $2.29, with no price 
range. The April 4a price (butter/powder) in California is $13.73, down 0.23 
cents from the previous month, but $1.19 higher from a year ago. This 
compares to the Federal Order Class IV price of $14.01 for April. The April 
4b price (cheese) is $14.30, up 54 cents from the previous month, but $1.59 
above a year ago. This compares to the Federal Order Class III price for 
April at $15.22.

1100CT Florence.KoneGonzalez@ams.usda.gov (608)422-8594 
Mike.Bandli@ams.usda.gov (608)422-8592 
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-
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