MD_DA240 DA MD DA240 FLUID MILK AND CREAM REVIEW - WEST Madison, WI June 22, 2017 (REPORT 25) FLUID MILK AND CREAM - WEST In California, milk production at the farm level flattened compared to last week. Hotter temperatures across the state are impacting milk output. They are also melting snow in the mountains. With most schools closed, bottlers have reduced their daily milk intakes. Balancing plants are taking in additional milk to help clear any unused milk by bottlers. Alfalfa fields are making excellent progress, and they are being cut and baled. Extreme hot weather is negatively affecting farm milk output in Arizona. This week, milk yield is trending down. Bottling demand has scaled back due to most educational institutions being on vacation. Eighty-five percent of alfalfa hay was rated good to excellent, compared to only 73 percent last week. Harvesting is taking place on more than 85 percent of alfalfa acreage. Milk production in New Mexico is dropping. The Southwest part of the state is experiencing warmer weather conditions that are taking a toll on cows' well- being. Some contacts suggest that milk production will continue to decline, as the weather heats up. Orders for Class I are holding flat. Milk holdovers from last week are steadily declining this week. Class II demand is slightly up due to increased orders from ice cream makers. The third cutting of alfalfa hay just started and is 13 percent completed. Sixty-nine percent of alfalfa hay was reported good to excellent. Although milk production in the Pacific Northwest is down year over year, processors say there is plenty of milk for manufactured product needs. Some impacts of the cold, wet winter may have lingered through the remainder of cow lactations, but warmer weather is helping milk production recover. Manufacturers say milk intakes are in relatively good balance with processing needs. Bottling demand is now fully into summer patterns. Warm weather has moved into much of the mountain states of Colorado, Idaho and Utah, but industry contacts say the heat has not impacted milk production yet. In most years, milk production peaks in late June or early July for areas within the region. According to the NASS Milk Production report, the states have added cow numbers since last year, and aside from some lingering effects of a harsh winter in Idaho, milk production continues to grow in Utah and Colorado. Milk processors say they have no problem getting the milk they need for most processing needs. Many manufacturing facilities are operating at or near full capacity. In the West, some industry participants confirm that condensed skim intakes from ice cream manufacturers are picking up. In general, cream is available in the West. However, supplies are getting tighter every week. Demand continues to be very active from ice cream manufacturers. This week cream multiples for all usages range 1.14-1.32. According to the DMN National Retail Report-Dairy for the week of June 16-22, the national weighted average advertised price for one gallon of milk is $2.55, up $0.03 from last week, and $0.04 higher from a year ago. The weighted average regional price in the Southwest is $2.94, with a price range of $2.29-$3.99. No ads were reported in the Northwest. The NASS Milk Production report noted May 2017 milk production in the 23 selected states was 17.8 billion pounds, 1.8% above a year ago. Milk cows in the 23 selected states totaled 8.72 million head, 81,000 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: May 2017 Milk Production, (USDA-NASS) (Million Lb.) % Change From 1 Year Ago Arizona 454 + 4.8 California 3515 - 1.1 Colorado 352 + 7.3 Idaho 1255 - 0.2 New Mexico 727 + 6.9 Oregon 222 - 3.5 Utah 188 + 3.9 Washington 564 - 1.4 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- home