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

California milk processors are getting prepared for additional milk

balancing during the holidays. Some smaller plants will reduce their

intakes or close, so more milk will be going to butter and powder

plants. Regional plants are in good shape and have the capacities

necessary to handle the expected extra loads of milk. This week, milk

production is even to up. Educational institutions are also closed for

the holidays. As the result, Class I sales are currently down. Recent

rains in California have not much impacted milk transportation and

deliveries. In general, milk yield is even to increasing. Some reports

suggest that there has been a lot of shifting in supplies.

In Arizona, processing plants are running at full capacities and taking good

volumes of milk. Milk supplies are increasing and seem to be higher

than demand. Therefore, more milk is moving to balancing plants.

Plant managers state that despite the increase in milk production, it

still hasn't reached that of last year. Fluid milk intakes are dropping

with educational institutions in recess and grocery stores planning for

the holidays.

In New Mexico, Class II usage wound down ahead of the holidays whereas cheese production schedules have increased to handle the additional manufacturing milk volumes. Repair/maintenance workloads at a Class III facility caused it to miss on

receiving planned deliveries of milk. Fortunately, manufacturing

capacities were adequate at other locations to take on the additional

milk volumes. As the result of schools’ closure for the holiday break,

Class I is also experiencing a reduced demand. Overall, milk

production is trending higher.

Milk production in the Pacific Northwest is following typical seasonal patterns. Bottling demand is easing back as educational institutions begin winter breaks. There is

plenty of milk for processing and the additional milk made available from school bottling is forcing milk handlers to implement their planned adjustments for the season. Precipitation has moved into the region and is beginning to recharge water reservoirs.

In the mountain states of Idaho, Utah and Colorado, milk production is strong.

Industry contacts say components are steady and have not come down

much from seasonal highs. There is plenty of milk for processing.

Distressed loads of milk are more prevalent in the northern parts of

the region. As a result, some milk loads are getting pushed into

neighboring states. Some farmers have lost access to markets. A few

farms have liquidated rather than face further financial stress, while

others are hoping proposed additional processing can improve

market conditions in the region. Milk intakes are in better balance in

the southern parts of the region.

In the West, there have been some push backs of condensed skim, resulting in more supplies. According to market participants, condensed skim is being more

contracted for next year compared to this year. Cream supplies are becoming more available in the West, whereas orders are dropping. Consequently, more cream has started to move to the churns. Cream multiples for all Classes are 1.05-1.26.

Western U.S., F.O.B. Cream Multiples Range

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All Classes: 1.0500 - 1.2600

Secondary Sourced Information:

The NASS Milk Production report noted November 2018 milk production in the 23 selected states was 16.4 billion pounds, 0.8 percent above a year ago. Milk cows in the 23 selected states totaled 8.72 million head, 16,000 head less than a year ago.

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