Fluid Milk and Cream - Western U.S. (3/28)
In California, it has been raining a lot recently. Nonetheless, milk production hasn't been much affected. Milk output remains seasonally strong and manufacturing plants have the capacity required to handle current milk supplies. As so, most of the milk is being processed close to its production site. Plant facility managers do not foresee any issue with milk handling during the spring flush. Milk sales to retailers are steady.
In Arizona, milk output is increasing. However, supplies are manageable within the state. Processing plants are still running near full capacities. Bottled milk demand is back up for supermarket sales now that the spring break is over. Overall, there is a good balance between milk offerings and orders.
Milk production is building seasonally in New Mexico, but efficiency in routing milk volumes to the nearest processing facilities is helping handlers save on freight costs. Milk volumes are in good equilibrium with sales. At most plants, there remains plenty of room for additional milk handling if the need arises. Repair and maintenance workloads are minor this week. Class I and III sales grew, but there was a slight decrease in Class II demand.
Pacific Northwest milk production continues to increase. Favorable weather is providing good cow comfort after a stretch of tough winter weather last month. Bottling demand is picking up as schools resume classes following spring break. There is plenty of milk for manufacturers and many plants are operating at or near full capacity.
Milk production in the mountain states of Idaho, Utah and Colorado is steady. Milk intakes are mostly in balance with processing needs. However, a few industry contacts suggest there are some spot loads of milk available at $3 under Class IV in Idaho, and some loads of milk are shifting around the region to fill sales orders. Farmers are confident the snow pack in the mountains will provide enough water for the upcoming cropping season.
Western condensed skim is in good supply. Drying is active. Nonetheless, less condensed skim is moving from Arizona into California this week. This might explain why some industry participants stated that condensed skim prices are a bit higher than what California buyers would like to pay.
There has been a little uptick on ice cream production schedules which in turn is drawing some cream loads away from the churns. Cream is also moving to other Class II products for the holiday. However, buyers are resistant to premium cream prices, but can't seem to find discounted sale prices. The cream market has tightened up a bit. Contacts say that some cream customers are looking to contract cream for the next three months.
Cream multiples for all Classes are 1.06-1.20. National Retail Report Dairy ± Fluid Milk Summary Advertised Prices at Major Retail Supermarket Outlets ending during the period of 3/22/2019 to 3/28/2019 Half Gallon, All Fat Tests Weighted Average Price National This Period Last Week Last Year Organic $4.35 $4.09 $4.71 Conventional $1.85 $2.29 $2.28 Regional (Conventional) Wtd. Ave. Low High Northwest $2.69 $2.69 $2.69 Southwest $0.98 $0.98 $0.98 Regional (Organic) Wtd. Ave. Low High Northwest $4.29 $4.29 $4.29 Southwest $4.38 $3.99 $4.99 Gallon, All Fat Tests Weighted Average Price National This Period Last Week Last Year Organic $6.62 n.a. $6.50 Conventional $2.88 $2.81 $2.44 Regional (Conventional) Wtd. Ave. Low High Northwest $1.99 $1.99 $1.99 Southwest $2.59 $2.59 $2.59 Western U.S., F.O.B. Cream Multiples Range - All Classes: 1.0600 - 1.2000