Fluid Milk and Cream - Western U.S. Report 13

California milk supplies continue to be available for all processing needs. Many customers have stocked up on bottled milk to insure they have enough if the stores were to close. As a result, some grocery stores’ shelves are empty and Class I demands have hit the roof. Class     III sales are also trending higher. Moving milk across regions is still possible for California handlers, but it is a bit costlier. 

Arizona milk production is strong. Milk loads are readily accessible to processors. However, they also continue to help with out-of-state     milk clearing. Bottled milk sales are up despite the closing of educational institutions during this coronavirus outbreak. Milk buying for use in households is compensating for the decrease in schools’ intakes. 

In New Mexico, Class I orders are significantly higher than usual as market uncertainty is pushing end users to pick up more milk. On the other hand, Class II and III demands are down. Despite disruptions in the activities of one Class III plant and one Class IV plant, milk holdovers are much lower compared to the previous week. Balancing needs have also decreased.

Pacific Northwest milk intakes have leveled off due to overbase program penalties curtailing milk output. Retail gallon bottling demand is still well above normal levels, but has pulled back from the apex of consumer purchases. Some industry contacts feel the bottling pipeline      has filled up and extra milk is spilling back into other processing channels. Manufacturers report plenty of milk for processing needs. Cream supplies are especially heavy thanks to reduced food service butter demand and heavier than normal bottling.

Milk production in the mountain states of Idaho, Utah, and Colorado remains strong. According to the latest NASS Milk Production report, February 2020 milk production was 11.3 percent higher in Colorado and 9.3 percent higher in Idaho over February 2019 production. Both states realized a significant increase in cow numbers and in milk production per cow. Industry contacts report that spot milk availability has dwindled in the face of strong retail demand for dairy products. Although heavily discounted milk loads have been common in Idaho throughout the winter and early spring, some contacts report a few loads of milk were sold at 25 cents above Class III price to round out processing needs.

Western condensed skim demands are stable. Processors are not looking to take on additional loads. As the result, some sellers are struggling to find a home for non-contracted condensed skim and are looking for out-of-state sale outlets. 

In the West, cream supplies vary from stable to higher. Buyers do not have any problem finding what they need. This week, there were very discounted loads of cream moving from the West to the East and the     Midwest. Cream multiples for all Classes are lower at the bottom of the range compared to last week.

     Western U.S., F.O.B. Cream
     Multiples Range - All Classes:               0.8000 - 1.2000

     Information for the period March 23 - 27, 2020, issued weekly

     Secondary Sourced Information:

     The NASS Milk Production report noted February 2020 milk production in the 24 selected states was 17.0 billion pounds, 5.6 percent up from a year ago. Milk cows in the 24 selected states totaled 8.84 million head, 39,000 head more than a year ago. The following      table shows western states included in the report and the monthly milk production changes compared to a year ago:

     February 2020 Milk Production, (USDA-NASS)

                         (Million Lb.)    % Change From 1 Year Ago

     Arizona                 407                  + 2.8
     California            3,412                  + 6.3
     Colorado                403                  +11.3
     Idaho                 1,267                  + 9.3
     New Mexico              674                  + 6.3
     Oregon                  209                  + 5.6
     Utah                    174                     …
     Washington              544                  + 7.7

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