Dairy Fluid Milk and Cream - Western U.S.
In California, schools have just started. As they fill their milk pipelines, they are creating an increase in demand for bottled milk.
Fortunately, milk production has somewhat recovered from the decrease that occurred a few weeks ago. Therefore, milk volumes are enough to meet all buyers’ needs.
The fires in California have not affected milk supplies or demand in that the affected areas are not the primary location of dairy farms. Nonetheless, they have made milk transportation more difficult in some areas.
In Arizona, milk production is unchanged from a week ago. Temperatures have cooled down a bit, but humidity persists. Nonetheless, it has not much impacted milk output. Milk volumes are in good balance with current demand. Class I sales flowing to schools and supermarkets are stronger.
Manufacturers are mostly processing instate milk and haven’t been taking any milk from neighboring states in the past weeks.
Overall, the fluid milk market tone is stable in Arizona. In New Mexico, Class I and III demand has trended slightly up this week, while Class II sales remain steady. Surprising to some market participants, milk production increased by many loads this week. Nonetheless, handlers do not have any issues with milk distribution.
Planned wash/maintenance at some dairy processing plants is creating a growth in milk holdovers, but they are manageable and expected to come down throughout the remainder of the week.
Pacific Northwest milk production has passed the peak but remains strong. Daytime temperatures, although still warm, are not as hot as the last few weeks, and nighttime temperatures allow cows to recharge. As a result, milk intakes are solid.
Processors have plenty of milk for manufacturing needs. Bottling demand is increasing as educational institutions begin fall terms. Milk production in the mountain states of Idaho, Utah and Colorado has yet to show any real signs of slowing down. With some public schools starting up, and strong sales into Class II manufacturers, there is a little less pressure on milk handlers.
However, abundant milk supplies persist, and discounted loads are still available.
In the West, condensed skim production is steady to increasing compared to a few weeks ago. Sales are steady. Stocks are becoming more available to purchasers. Cream demand is still good, but not as strong as it was a few weeks ago. Requests from ice cream manufacturers have decreased.
Some butter plants have started to churn a little more cream while others are still at rest. Cream is also getting less tight in the market.
Multipliers have decreased somewhat this week. Some people believe that they have already reached their peak level for this year and are unlikely to further increase. Multipliers for all Classes range 1.11-1.32 this week.
According to California Department of Food and Agriculture, September 2018 Class 1 prices in California are $16.87 in the North and $17.14 in the South. The statewide average Class 1 price based on production is $16.89. This price is up $0.74 from the previous month, but $1.77 lower than a year ago.
Milk pooled on the Arizona Order 131 totaled 427.7 million pounds in July 2018. Class I utilization accounted for about 23.7 percent of producer milk. The uniform price was $15.03, down $0.67 from last month and down $1.99 below one year ago.
Milk pooled on the Pacific Northwest Order 124 totaled 769.1 million pounds in July 2018.
Class I utilization accounted for 18.8 percent of producer milk. The uniform price was $14.73, down $0.74 from last month and $1.87 below one year ago.