MD_DA240
DA
MD DA240 FLUID MILK AND CREAM REVIEW - WEST

Madison, WI August 24, 2017 (REPORT 34)

Several dairy operators in California are seeing a slight uptick on 
farm milk output. With many schools reopening, manufacturing milk 
volumes are less available, but are sufficient to meet Class 1 
processing needs. Consequently, demand for bottled milk is higher. At 
this point of the year, milk butterfat levels remain low, which is 
supporting higher cream premiums. Milk requests from retailers and 
food service are steady while demand from Class 3 (ice cream) makers 
remains strong. 

In Arizona, milk production is steady as the monsoon season has been 
less active this week. Compared to the last year, several processors 
report having more than adequate milk supplies to cover several 
manufacturing needs. Class I orders from educational institutions are 
even as pipelines have been filled. However, requests from the retail 
sector are up as some grocery stores are restocking shelves. Demand 
for Class II is steady. 

In New Mexico, farm milk output is even from last week as the climate 
in the main dairy zones has been stable. Bottled milk sales into 
educational institutions are up. Class I milk demands from retailers 
and food service are mostly steady. Class II sales are slightly up as 
interest for ice cream remains active. Manufacturing milk volumes 
moving into cheese processing facilities are lower as some plants 
have repair/maintenance works. 

Pacific Northwest milk production is steady to lower, following 
typical seasonal patterns. Several days of warm weather have issued 
into the region, but the temperature swings are not enough to alter 
milk output much. Milk intakes are generally meeting expectations and 
are in balance with processing needs. However, dry weather is 
impacting pastures. Pasture and range conditions are good or 
excellent in 31 percent of Washington and 37 percent of Oregon. 
Bottling demand is increasing as some schools have begun fall terms 
and more will start in the next two weeks. 

In the mountain states of Idaho, Utah and Colorado, milk production 
is still heavy and manufacturers are having no trouble getting milk 
to meet processing needs. Some of the issues at several processing 
facilities have straightened out, but a few manufacturers have 
scheduled down days this week. Most milk is able to find a home 
within the region, but it may take a little juggling by handlers. 
Pasture and range conditions are good or excellent in 66 percent of 
Idaho and Colorado and 41 percent of Utah.

In the West, demands for condensed skim from NDM/ice cream processors 
are fair to good. Regional butter production is generally steady as 
cream is readily available. However, a few churn operators continue 
to slow production rates, opting to sell off cream in lieu of making 
butter. Meanwhile, cream sales to ice cream manufacturers are active, 
but are less intense compared to the previous month. This week, cream 
multiples for all classes are unchanged, ranging from 1.07 to 1.27. 

 
According to the DMN National Retail Report-Dairy for the week of 
August 18-24, the national weighted average advertised price for one 
gallon of milk is $2.24, down $0.98 from last week, and $0.34 lower 
from a year ago. The weighted average regional prices in the 
Southwest and Northwest are $2.67 and $1.83, respectively. 

The NASS Milk Production report noted July 2017 milk production in 
the 23 selected states was 17.2 billion pounds, 1.9 percent above a 
year ago. Milk cows in the 23 selected states totaled 8.73 million 
head, 72,000 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:  

July 2017 Milk Production, (USDA-NASS)

                       (Million Lb.)    Percent Change From
                                            1 Year Ago
  
Arizona                   404                + 6.3
California               3,372               - 0.2
Colorado                  361                + 6.8
Idaho                    1,295               - 0.2
New Mexico                706                + 8.4
Oregon                    216                - 3.1
Utah                      194                + 9.6
Washington                560                - 2.1


1100CT Angel.Teran@ams.usda.gov (608)422-8593 
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-home