MD_DA240
DA
MD DA240 FLUID MILK AND CREAM REVIEW ? WEST

Madison, WI August 3, 2017 (REPORT 31)

Farm milk production in California is following a downward trend due to 
hotter daytime temperatures and some rainfalls. Some processors report 
having a hard time finding the volume of milk needed for their daily 
activities. Others report having enough milk to cover their current 
manufacturing obligations. Class 1 demand is slightly down. Demands for dry 
milk products are lower as well. Requests for ice cream and other frozen 
desserts are strong. The July 4a price (butter/powder) in California is 
$16.41, up $0.50 from the previous month, and $2.18 higher from a year ago. 
This compares to the Federal Order Class IV price of $16.60 for July. The 
July 4b price (cheese) is $15.29, down $0.31 from the previous month, but 
$0.62 above a year ago. This compares to the Federal Order Class III price 
for July at $15.45. Arizona's milk production is still dropping. Monsoon 
rains have caused some flooding in the region this week. However, they did 
not affect milk hauling to the plants. There are enough milk supplies to 
meet most of the processing needs. Contacts report that schools are starting 
to reopen. As a result, Class I milk intakes are increasing. Demand for ice 
cream and frozen desserts' manufacturing is strong as it is usually for this 
time of the year. Alfalfa hay was reported 74 percent good to excellent, and 
topsoil moisture levels are 100 percent adequate to surplus. In New Mexico, 
several recent heat incidents have contributed to lower milk production. 
However, they have not much distressed milk volumes. Class I intakes are 
slightly down, but they are anticipated to increase in the coming weeks as 
educational institutions reopen for the new school year. Class II sales are 
steady to increasing as interest for ice cream production remains strong. 
Demand for Class III is steady. In some parts of New Mexico, report suggest 
the presence of light stripe in alfalfa fields due to recent rains as well 
as some insect pressure from army worms. Pacific Northwest milk cows had 
been enjoying good cow comfort, but a heat wave this week is baking the West 
Coast. Although a little early to know the full effects of the heat, 
industry contacts expect decreased milk production and lower components. 
Demand for the milk is steady with processors currently getting adequate 
amounts. Bottling demand for school startups is still a few weeks away. In 
the mountain states of Idaho, Utah and Colorado, milk intakes are heavy. 
Manufacturers report milk components are down, but the region has seen 
strong growth in overall milk production through the year. Industry contacts 
report some milk is being discarded in parts of Idaho. The combination of 
heavy milk supplies, disruptions at several processing facilities and 
difficulty in moving milk to alternative processing facilities has led to 
the situation. Some distressed milk is moving at $4 to $5 under Class. Milk 
contacts hope the situation will correct itself soon. In the West, condensed 
skim is readily available for processing needs. Some contacts report selling 
higher volumes of condensed skim to cheese plants. Although Western cream 
demand was quiet in some part of the region last week, it has come back 
stronger this week. In general, cream is readily available for manufacturing 
activities. Some industry contacts report that conventional cream is harder 
to place. Cream multiples are 1.09-1.26. According to the DMN National 
Retail Report-Dairy for the week of July 28-August 3, the national weighted 
average advertised price for one gallon of milk is $2.43, no change from 
last week, and $0.23 lower from a year ago. The weighted average regional 
price in the Southwest is $2.75, with a price range of $1.89-$2.97. The 
weighted average regional price in the Northwest is 2.99.

1100CT Florence.KoneGonzalez@ams.usda.gov (608)422-8594 
Michael.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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