Fluid Milk and Cream - Western U.S. Dairy Report

California milk processing activities are back to normal after the shortened holiday weekend.

Weather conditions are favorable for milk production growth. Most manufacturing plants did not have any issues running last week. This week, bottling milk sales have increased compared to a week ago. Despite the closing/selling of many dairies in California, the alfalfa hay market has not been much affected because most hay sellers are serving other domestic and international markets aside from California. Arizona milk volumes produced are following the same pattern of the last few weeks, with output being stable to somewhat building up.

According to some industry participants, this year milk volumes are lower compared to last year. No milk is currently going out of state or coming in state. Demand for Class II and III milk are picking up again ahead of the end of the year holiday. At some processing facilities, butter is not being currently produced. Class I intakes are back up since schools are refilling their pipelines. New Mexico milk production is trending higher on a weekly basis. Holdovers remain manageable although they are a little higher this week. Milk handling went well over the Thanksgiving holiday weekend. Processing and balancing plants are running as planned.

Fluid milk interest returned to normal volumes as schools resumed this week. Class II and III sales are surging because manufacturers have started the preparation of the year-end holidays’ dairy products. Pacific Northwest milk production is generally steady and following typical seasonal patterns. Manufacturers state they have plenty of milk for most processing needs without reaching far from their local supplies. Bottling demand has returned to the same levels as before the Thanksgiving holiday week.

In the mountain states of Idaho, Utah and Colorado, milk production is strong. Manufacturers say they have plenty of milk for most processing needs. The recent holiday week resulted in only minimal issues for milk handlers, however financial strains continue for farmers. While intakes continue to rise across most of the region, limited processing homes and low milk prices are hitting farmers in the northern part of the region especially hard. Some dairy farmers have lost access to their markets for milk and a few others are choosing to liquidate their herds. The condensed skim market is stable. Supplies are available to fill current needs. The drying schedules of condensed skim are also active.

In the West, cream supplies are tighter than usual, but a few occasional loads become available to spot buyers from time to time. Prices have increased somewhat from last week.

Now, cream multiples for all Classes are 1.10-1.28. Western U.S., F.O.B. Cream Multiples Range - All Classes: 1.1000 - 1.2800

According to California Department of Food and Agriculture, October 2018 pool receipts of milk in the state total 3.13 billion pounds. This is 1.9 percent higher compared to the same month a year ago. From January through October 2018, receipts are 0.9 percent higher from the comparable period in 2017. The Value at Test price is $16.60, $.43 higher than the previous month, but $.62 below a year ago. The percentage of receipts used in Class 1 products is 14.14 percent. The October quota price is $16.72, and the over quota price is $15.02. These prices are $.27 above last month, but $.48 lower from a year ago.


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