Fluid Milk and Cream - Western U.S.
California weather conditions remain wet and cold, keeping cows' milk output flat. A mechanical breakdown at one processing facility resulted in more milk supplies in the market because the plant had to close and look for alternative ways to channel its milk. Although several loads of milk were successfully redirected to other processing locations, according to some reports, some milk was discarded.
Class IV fulfillment was also affected as intakes declined. Aside from this incident, other balancing agreements are getting milk placed as scheduled.
Class I sales are unchanged from last week. After a drop last week, farm milk production in Arizona is back up this week. The fluctuation in milk volumes is partly caused by variations in temperatures as well as heavy rains that occurred recently.
Class I milk demand is steady. New Mexico milk production continues to increase. The volume of milk moving into cheese vats is significantly lower compared to last week because some manufacturers are trying to keep their inventories at low levels while others are dealing with repair and maintenance workloads.
Class I demand is also down, but Class II orders are up. Although milk holdovers are higher this week, they remain manageable. Many processing facilities are running at or near full capacities.
Milk production in the Pacific Northwest is steady to higher. While the region is still getting occasional snowfall, disruptions to milk hauling are easing. Bottlers are getting caught up, and bottling demand is returning to normal seasonal patterns. As schools enter spring breaks, single unit packaging is expected to step back a bit. Cream and milk are readily available for most processing needs. A positive result of the winter storms has been the reduction of dryness and drought conditions across the region.
Milk production in the mountain states of Idaho, Utah and Colorado is level. Due to fluctuations to fluid milk needs and maintenance schedules, milk handlers moved a few loads into neighboring states for processing. Milk processors had plenty of milk for manufacturing. Earlier in the week, a processor announced plans to begin construction of a large aseptic milk processing plant in Idaho (Twin Falls). The facility will begin operations in the summer of 2020.
Some butter producers do not have enough capacities for extra loads of cream due to their facilities being already full of cream. Therefore, they are limiting spot purchases. Cream availability is high in the West and seems even more prevalent in California. While butter output is active, ice cream production has yet to pick up.
Multiples for all Classes increased a bit, ranging 1.00-1.17. Western U.S., F.O.B. Cream Multiples Range - All Classes: 1.0000 - 1.1700 Information for the period February 25 - March 1, 2019, issued weekly