MD_DA240
DA
MD DA240 FLUID MILK AND CREAM REVIEW - WEST

Madison, WI June 29, 2017 (REPORT 26)

FLUID MILK AND CREAM - WEST

Farm milk production in California dropped slightly this week. Some market 
participants report seeing a higher decrease in milk produced last week, 
however, they are expecting production to improve in the coming weeks. In 
most processing plants, balancing capacities are adequate. Fluid milk demand 
is flat. In some part of California, the summer hay season has started. A 
number of dairies in Central California are looking for high quality hay 
from northern California, Utah, and Idaho. According to California 
Department of Food and Agriculture, May 2017 pool receipts of milk in 
the state total 3.32 billion pounds. This is 2.2 percent lower 
compared to the same month a year ago. From January through May 2017, 
receipts are 3.1 percent lower from the comparable period in 2016. 
The Value at Test price is $15.90, $0.69 higher than the previous 
month, and $3.06 above a year ago. The percentage of receipts used in 
Class 1 products is 13.30 percent. The May quota price is $16.46 and 
the over quota price is $14.76. These prices are $0.74 above last 
month, and $2.83 higher from a year ago. According to CDFA, May 2017 
Class 1 sales in California totaled 53.7 million gallons, up 7.4 
percent from last month, but down 1.2 percent from the previous year. 
From January through May 2017, Class 1 sales totaled 261.8 million 
gallons, down 3.4 percent from the comparable period in 2016. Milk 
output is down in Arizona as the state reached very high temperatures last 
week and part of this week. According to some industry contacts, this month 
milk production is on average 3 percent down compared to last month. The 
butterfat in milk has started to decrease as well. High volumes of cream are 
currently moving into ice cream and frozen dessert manufacturing. Bottled 
milk sales are steady. In New Mexico, milk production is seasonally slowing 
down. However, some contacts report that milk supplies are very long and 
some loads are moving to the northern part of the U.S. Manufacturers are 
adequately balancing any milk not used by bottlers. Class II requests are 
declining for some processors. On the other hand, Class I intakes are 
steady. Class III sales are lower to steady. Industry contacts in the 
Pacific Northwest report milk intakes are in good balance with processing 
needs. Although Class III and Class IV processors are vying for some of the 
available milk, there is generally plenty of milk to go around. Seasonal 
weather is providing good cow comfort and forages are in sufficient supply 
and quality. Pasture and rangeland conditions are good or excellent in 70 
percent of Oregon and 81 percent of Washington. In the mountain states of 
Idaho, Utah and Colorado, manufacturers report plenty of milk for most 
processing needs. Much of the milk in the region is finding a home nearby. 
Some milk is moving within the region and a few extra loads are coming into 
the mountain states from the South Central region. Processors are operating 
facilities at or near full production schedules. Industry contacts report 
good volumes of milk and cream moving to ice cream or other Class II 
processors. Intermittent rains have made making high quality, first cutting 
hay more difficult. Some contacts suggest second cutting hay is getting made 
with better feed quality. Pasture and rangeland conditions are good or 
excellent in 78 percent of Colorado, 69 percent of Utah and 87 percent of 
Idaho. Across the Western region, cream supplies are tightening. Although 
cream demand from ice cream and frozen dessert makers is still high, 
contacts suggest that cream is plentiful in some parts of the region. Cream 
multiples for all Classes run from 1.15 to 1.32. According to the DMN 
National Retail Report-Dairy for the week of June 23-29, the national 
weighted average advertised price for one gallon of milk is $2.43, 
down $0.12 from last week, but $0.23 higher from a year ago. The 
weighted average regional price in the Southwest is $2.49, with a 
price range of $1.88-$2.99. The weighted average regional price in 
the Northwest is $1.88, with no price range.

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