MD_DA240
DA
MD DA240 FLUID MILK AND CREAM REVIEW - WEST

Madison, WI October 5, 2017 (REPORT 40)

California farm milk prices are reported to be higher in the spot 
market. Nonetheless, industry contacts suggest that milk production 
is increasing as the weather is getting cooler. Fluid milk demand 
into schools' pipelines and grocery stores is steady. Most balancing 
plants are only processing contracted volumes. Some are finishing 
their repair/maintenance works in preparation for the Fall. The 
September 4a price (butter/powder) in California is $15.69, down 
$0.72 from the previous month, but $2.58 higher from a year ago. This 
compares to the Federal Order Class IV price of $15.86 for September. 
The September 4b price (cheese) is $14.88, down $0.41 from the 
previous month, but $0.45 higher from a year ago. This compares to 
the Federal Order Class III price for September at $16.36. According 
to CDFA, August 2017 Class 1 sales in California totaled 52.6 million 
gallons, up 9.7 percent from last month, but down 3.6 percent from 
the previous year. From January through August 2017, Class 1 sales 
totaled 410.9 million gallons, down 3.4 percent from the comparable 
period in 2016. According to CDFA, October 2017 Class 1 prices in 
California are $18.02 in the North and $18.30 in the South. The 
statewide average Class 1 price based on production is $18.04. This 
price is down $0.62 from the previous month, but $0.25 higher than a 
year ago. Milk processors in Arizona continue their 
maintenance/repair workloads in view of the fall. Farm milk output in 
Arizona is trending upward as cooler weather conditions are starting 
to replace hot ones. Sales into Class I is stable at previous week 
level. Processing plants are working at or near full capacities. 
Overall, the fluid milk market is balanced in Arizona. Contacts 
report that some balancing plants in New Mexico have reduced their 
daily activities due to moving their milk into pipelines in the 
Southeast. Sales to educational institutions in New Mexico are steady 
to slightly lower. Class II demand is steady, but Class III is 
requesting steady to slightly less milk. Pacific Northwest milk 
production is seasonally in balance. Bottling demand is steady. Dairy 
manufacturers have adequate supplies of milk needed for most 
processing needs and are getting ready for the final push before peak 
holiday demand. Most milk is finding a home within the immediate milk 
shed. Milk production in the mountain states of Idaho, Colorado and 
Utah is strong. Supplies are long and manufacturers have plenty of 
milk for most processing needs. A few surplus loads continue to find 
their way into neighboring states for processing. Western condensed 
skim supplies are declining. Prices are higher now compared to 
August. Industry contacts report that cream is plentiful in the West 
region. Sales are steady to lower. Ice cream processors have slowed 
down their cream intakes. Butter makers are also taking less cream. 
However, cream sales to cheese plants are more active. Cream 
multiples for all classes are 1.06-1.28. According to the DMN 
National Retail Report-Dairy for the week of September 29-October 5, 
the national weighted average advertised price for one gallon of milk 
is $2.66, up $0.12 from last week, and $0.16 higher from a year ago. 
The weighted average regional price in the Southwest is $3.52, with a 
price range of $2.79-$3.99. The weighted average regional price in 
the Northwest is $1.85, with a price range of $1.79-$1.99. 

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-home