Fluid Milk and Cream - Western U.S. Report 17
In California, milk volumes are abundant. As so, several processors continue to receive requests to help clear some loads. Despite, currently discounted prices of spot loads, many can hardly increase their processing volumes as they are already running at full capacity. According to industry participants, spot milk is ranging from $1.50-$7.00 under Class. Class I intakes are steady compared to last week, but lower than usual.
In Arizona, milk production is mostly unchanged from a week ago. Industry players continue to be challenged by abundant milk volumes and limited processing room. Many producers are pushing back on additional offers of milk. Bottled milk orders are unchanged, while milk balancing has skyrocketed to avoid many loads from going to waste.
With the COVID-19 induced closing of schools and restaurants, milk supplies left without a place to go increased to the point that New Mexico industry participants could hardly handle all the loads. In an effort to better manage milk volumes, several producers engaged in a milk production reduction program. In addition, some processors are adding extra milk to their orders to help clear excess milk. Milk donations to food banks are also used to balance milk supplies. According to contacts, a combination of all these methods have, so far, contributed to better milk volume management. Class I and III intakes are lower from a week ago. Balancing needs have also declined.
Pacific Northwest milk production continues to gradually increase along seasonal patterns. Favorable weather has facilitated strong milk output. Most processing facilities are at or near full capacity. Milk handlers say they are shifting loads around to make room for available milk. Bottling demand has stayed above normal levels, helping soak up a little of the extra milk. Although there have not been reports of dumped milk loads in the region, industry contacts say some liquid buttermilk has been discarded and balancing plants are not able to take on much more milk.
Milk production in the mountain states of Idaho, Utah, and Colorado is strong. As shown by the recent NASS Milk Production report, the number of dairy cows and milk per cow continues to expand in the mountain states. With an already stressed processing infrastructure, the abundant milk supply creates an obstinate challenge of what to do with all of the milk. Industry contacts say some milk is getting donated to food aid programs. Others say some milk is being diverted to calf feeding operations. Milk handlers are doing what they can to avoid milk hitting the ground. Even still, there are heavily discounted milk loads and loads of milk getting discarded in the region.
Condensed skim sales are stable. Finding homes for spot loads is challenging because most customer outlets are full. However, some vendors report being able to sell a few loads locally.
Western cream supplies continue to be plentiful, surpassing current demands. Butter churning is active, but can hardly absorb all the cream. As it is becoming more difficult to find new sale outlets, some processors are selling their cream to the first interested spot buyer. Cream multiples for all Classes are unchanged from a week ago. Western U.S., F.O.B. Cream Multiples Range - All Classes: 0.4500 - 0.9000