Fluid Milk and Cream - Western U.S. Report 18
Milk production remains strong in California. Although handlers are still looking to place a few spot loads of milk, they report that milk volumes are under control this week. There was no major change in bottled milk sales. Discounted loads of milk are not as prevalent as in the past weeks. Overall, the market seems to be recuperating bit by bit from the COVID-19 pandemic.
In Arizona, industry contacts report that they can now better manage their milk supplies. The peak of the spring production has passed, so milk outputs have started to decline. Despite higher temperatures, reaching the three-digit numbers, handlers are content with the milk volumes at hand. Class I intakes are unchanged from the prior week.
In New Mexico, farm milk yield is trending lower compared to the previous week. Industry participants say that milk volumes are more manageable despite current maintenance workloads at a couple of processing plants. Class I and II intakes are also a bit down, whereas Class III sales have increased. Balancing needs have dropped.
Pacific Northwest milk production is generally steady. The region is experiencing pleasant weather, which is keeping the milk flowing, but efforts by milk processors and farmers to curb excess production have helped keep milk output in better balance. Industry contacts point to the overbase programs set in place in January as one of the tools the industry used to control milk supplies. Manufacturers are running facilities at or near full capacity. Bottling demand has eased back some as the industry finds a new balance to milk flows. With a little less milk moving into the bottling pipeline, and more ice cream coming online, cream supplies saw some firming.
Milk production in the mountain states of Idaho, Utah, and Colorado remains strong. Favorable weather is aiding cow comfort. Dry weather and good amounts of water reserves have helped farmers launch into spring planting. The hope for a good spring cropping season relieves some of the stress, but financial hardships are common. A few companies are providing milk and dairy products into food banks to help those in need and move some of the extra dairy stocks to where they can be used. Industry contacts say the industry is doing what they can to keep milk and dairy products moving in the marketplace. However, some contacts estimate between 500,000 and 1 million pounds of milk are being discarded per day in Idaho. A few manufacturers are requesting farmers throttle back on production by at least 10 percent, and others are looking for creative ways to disincentivize milk production.
Condensed skim sales are unchanged, but are under forecasted levels for some processors. Some sellers continue to look for ways to clear a few loads of condensed skim.
In the West, some processors are able to better handle their cream supplies. Those who were sending a few loads to Mexico at discounted prices have stopped shipping as they have the capacities to process all their cream in the domestic market. Churning remains active. Cream sales to ice cream makers are starting to pick up. Cream multiples for all Classes are higher at the top of the range.
Western U.S., F.O.B. Cream Multiples Range - All Classes: 0.4500 - 1.0000