Fluid Milk and Cream Update - Western U.S.
Milk output is not expected to drop significantly below its current levels for the rest of the summer.
(USDA Market News)
In California, milk output is still low, but according to some reports, it has stabilized now. Milk output is not expected to drop significantly below its current levels for the rest of the summer. Balancing plants report not being as tight in milk supplies as they were last week.
Fluid milk demand is unchanged from a week ago. Arizona farm milk production continues at a lower rate. Humidity caused by the monsoons, accompanied by higher temperatures, is contributing to an uncomfortable environment for cows’ wellbeing.
Most schools in the state are back from the summer break. As a result, milk intakes for Class I have increased throughout the week as school pipelines get filled.
With the reduction in processing activities, plant managers have extra downtimes to use for repairs and maintenance of plant equipment. They have stopped taking milk from out of state plants as most of those plants now have enough room to balance their own milk.
Like in other states, climatic conditions have been impacting New Mexico milk yield. This week, milk production has decreased, but remains in line with seasonal norms. Supplies of and demand for milk are in good balance.
Class I and II sales have slightly decreased. Overall, Class III demand decreased. However, most plants¶ Class III milk intakes increased, except for one plant which drastically decreased their orders, causing a decline on total Class III intakes. Handlers report that there is enough milk to meet all processing needs.
Pacific Northwest milk production is steady. Parts of the region got relief from the high temperatures that have blanketed the area for the last few weeks. Although still warm, the more temperate weather allows cows to recharge and kept milk flowing into dairy processors. Manufacturers state their facilities are full and they are getting the milk needed from their usual patrons close by.
A lot of milk and cream are moving into ice cream and other Class II manufacturing facilities.
Bottling demand is steady, but industry contacts expect this to build as educational institutions begin fall terms over the next month.
Industry contacts in the mountain states of Idaho, Utah and Colorado report milk supplies remain long. Milk production is relatively steady and heavy. While much of the region has had a run of very hot days, nights are cooler, to the point of cows being able to eat, drink and recharge for the next day.
Manufacturers are getting more than enough milk. Some heavily discounted loads are finding homes in surrounding states, often with the added pain of freight charges.
Dairy contacts say feedstocks are ample and of good quality. As milk production remains low in many parts of the western region, condensed skim availability is also lower.
Nonfat dry milk production has somewhat diminished. Buyers say that they can’t always find the volume of condensed skim they want. Ice cream makers are taking on some loads.
In the West, cream sales are strong into ice cream manufacturing plants. Many churning activities have either been reduced or stopped. Some butter manufacturers are taking advantage of higher cream premiums by selling cream in lieu of making butter. Cream is moving between western states to satisfy customers’ needs.
However, some reports suggest that trucks are hard to find. As a result, not all cream orders can be fulfilled. Cream market is firm.
According to California Department of Food and Agriculture, June 2018 Class 1 sales in California totaled 46.4 million gallons, down 10.1 percent from last month, and down 4.8 percent from the previous year. From January through June 2018, Class 1 sales totaled 300.7 million gallons, down 3.2 percent from the comparable period in 2017.
According to the California Department of Food and Agriculture, the July 4a price (butter/powder) in California is $13.72, down $0.50 from the previous month, and down $2.69 from a year ago. This compares to the Federal Order Class IV price of $14.14 for July.
The July 4b price (cheese) is $14.09, down $0.34 from the previous month, and $1.20 lower from a year ago. This compares to the Federal Order Class III price for July at $14.10.