Fluid Milk and Cream - Western U.S. Report 16
In California, milk outputs are stable to a bit up. Many processors continue to receive requests to process more milk. However, most of them don't have room to take additional loads. According to industry contacts, there is an overabundance of milk within the state. Class I deliveries are steady compared to the previous week. Milk transportation is going on without any issue.
Milk yield in Arizona continues on a strong tone. Some manufacturers had to decline taking additional loads of milk as they do not have the capacities to process them. Milk prices continue to be lower and supplies exceed current demands. Balancing activities are ongoing. Class I sales are unchanged from a week ago.
In the past weeks, New Mexico, milk volumes were greater than balancing capacities. Handlers were forced to move some loads into sub-value markets and disposal sources. As a result, milk prices were below Class. This week, most processing plants have resumed to their normal full orders and are running at full capacities. Class I and III intakes are up, whereas Class II sales are stable. Balancing capacities continue to be used to the maximum. Compared to the previous week, surplus milk has declined.
Milk production in the Pacific Northwest is seasonally strong, propelled by favorable weather. Although the milk handling system is stressed by heavy milk output and abnormal demand patterns created by the COVID-19 pandemic, industry contacts do not report any milk being dumped at this time. Instead, milk is getting shuttled around the immediate region to find a home. Manufacturing plants are full, and balancing space is tight. Contacts report that some liquid buttermilk has been discarded because there was no space in the dryers. Demand for retail dairy products, in general, is strong. Industry participants are working hard to find creative ways to overcome bottlenecks to keep milk utilization maximized and consumer needs met. Bottling demand is still elevated under these new normal conditions, but has eased back as the pipeline is filled.
In the mountain states of Idaho, Utah, and Colorado, milk production continues to seasonally expand. Manufacturing facilities are running at capacity and are often not able to take on additional milk. Industry contacts report discounted spot offers of milk or cream are common. In some cases, loads are sold based on covering the freight costs and not much else. In other cases, milk and cream are getting fed back to livestock or disposed. Manufacturers that make retail dairy products are faring a little better than those that provide food service accounts. Consumer packaging lines are especially tight, but processors are working hard to find ways to improve throughput. In the West, condensed skim continues to be abundant. Many local customer outlets are full, making it challenging for sellers to find homes for spot loads. Some are looking to sell out of their state.
While cream availability remains high in the West, some manufacturers don't have any issue with clearing their loads, while others are struggling to find additional processing room. Cream is selling at a discount in most parts of the West. Cream multiples for all Class have declined. Western U.S., F.O.B. Cream Multiples Range - All Classes: 0.4500 - 0.9000 Information for the period April 13 - 17, 2020, issued weekly Secondary Sourced Information:
Milk pooled on the Pacific Northwest Order 124 totaled $638.3 million pounds in March 2020. Class I utilization accounted for 24.27 percent of producer milk. The uniform price was down $0.71 from last month, but $0.32 above the same month a year ago.
Milk pooled on the Arizona Order 131 totaled 462.5 million pounds in March 2020. Class I utilization accounted for about 25.26 percent of producer milk. The uniform price was down $0.69 from last month, but $0.38 above the same month a year ago.