Fluid Milk and Cream - Western U.S. Report 15
In California, milk production is unchanged compared to the past week. Milk availability has grown due to lower demands from grocery and school accounts. Class II and III makers have sufficient milk for their day to day production and are already running at their maximum capacity. Class IV production is very active. Handlers continue to look for additional options for clearing their milk intakes.
In Arizona, some customers have pushed back on milk orders as they have enough supplies and can't afford to take more. Processing plants continue to run at full capacities. Grocery store intakes have diminished, and according to contacts, milk prices have dropped in some areas as there are more offers compared to requests. The weather condition has been great in Arizona, favoring more milk production. Class II and III sales are stable to balanced. Processors continue to balance as much milk as possible. They are not taking outside milk and some of them had to discard a few loads of milk due to the lack of processing room.
New Mexico milk supplies are still plentiful, surpassing what handlers are comfortable with. Most destinations for Class I milk are not fully functional right now, putting pressure on handlers to find alternative ways to use the milk. A lot of milk is going to balancing plants, but most plants within the state are full and can't take additional loads. Class II and III sales are steady to declining. Transportation doesn't seem to be a problem.
Pacific Northwest milk production is steady to seasonally rising, even as manufacturers would prefer to take in less milk. Processors are working to encourage farmers to curb milk output. However, producers, faced with shrinking milk checks, are also under a financial squeeze. In addition, slaughter capacity restraints may make it difficult to shrink the herd, and cow biology does not provide an off switch for milk production. Retail bottling demand, like many consumer dairy goods, has faded somewhat. While still above normal, the industry is trying to figure out the new balance to dairy supply and demand. After the surge in consumer retail demand a few weeks ago, industry contacts wonder what reorders will look like. Many market observers think that while retail demand is helping cover some of the loss in restaurant and institutional demand, it cannot completely cover the difference.
Milk production in the mountain states of Idaho, Utah, and Colorado, continues to slowly rise. There is a long way to go before parts of the region typically reach the zenith of seasonal milk production. In most years, spring flush is reached in late June in Idaho. Industry contacts report offers aplenty of heavily discounted milk. In some cases, discounts are as much as $9 below Class IV. Processors are not overly eager to take on any added milk with the uncertainty of markets in which to sell finished goods. Some milk and cream are getting turned away from processing plants and are being discarded.
Western condensed skim is plentiful, and buyers are taking fewer spot loads. Drying is ongoing. In the West, cream supplies are heavy. Churns are full. Manufacturers continue to look for other sale outlets, but buyers are very limited. Many sellers prefer to clear cream at discounted prices rather than discard it. Cream multiples for all Classes are unchanged. Western U.S., F.O.B. Cream Multiples Range - All Classes: 0.5000 - 1.0000 Information for the period April 6 - 10, 2020, issued weekly Secondary Sourced Information: Dairy Products Report - Ice Cream, Regular, Hard Released April 2, 2019, by the National Agricultural Statistics Service (NASS), Agricultural Statistics Board, United States Department of Agriculture (USDA). Ice Cream, Regular (Hard) Production – States and United States: February 2019 and 2020 Monthly Production (1000 Gallons) Percent Change from Total Cream, Regular (Hard) Feb Jan Feb Feb Jan Region 2019 2020 2020 2019 2020 United States 52,120 52,157 51,790 -0.6 -0.7 Atlantic 12,447 11,956 11,971 -3.8 0.1 Pennsylvania 2,631 2,969 3,419 30.0 15.2 Central 30,099 30,467 31,128 3.4 2.2 Missouri 2,965 1,847 2,907 -2.0 57.4 Ohio 1,721 2,013 1,839 6.9 -8.6 West 9,574 9,734 8,691 -9.2 -10.7 California 4,337 5,397 4,312 -0.6 -20.1 Oregon 980 1,167 1,017 3.8 -12.9 Utah 2,276 1,587 1,582 -30.5 -0.3 Ice Cream, Regular (Hard) – Cumulative Production: January-February Cumulative Production Percent Change (1000 Gallons) from Report Month 2019 2020 2019 February 105,671 103,947 -1.6