Fluid Milk and Cream - Western U.S. Report 22
In California, milk production is at seasonal levels. There is enough milk to fill current customers' needs. Processing facilities are running near full capacities. Discounted loads of milk are not as common as they were a few weeks ago. As so, many manufacturers are able to manage all their milk in-house. Bottled milk deliveries remain stable.
In Arizona, milk output is mixed. Recent cooler than usual weather for this time of the year has given a short boost to cows' comfort. However, the cool weather didn't last for a long time. Due to the holiday related closings, several manufacturing plants pushed back on milk at the beginning of the week. Nonetheless, handlers managed to reroute more loads to balancing plants during that time. Bottled milk demands are generally flat.
New Mexico milk production is level. While supplies remain unchanged from the previous week, demands for milk are stronger. Handlers report being able to satisfy all buying requests. Class I and III sales picked up, whereas Class II purchases dipped a bit. Balancing plants are running low as most of the milk is being used by other classes of milk.
Milk production in the Pacific Northwest is leveling off according to dairy contacts, but components are higher than typical. Bottling demand is steady and moving into the more seasonal summer patterns. Schools have been out of session due to COVID-19 for the last few months. Retail sales are driving most of the fluid milk consumption. Dairy manufacturers are running full schedules. Cream supplies are generally tighter, with higher Class II and ice cream processing.
Mountain state (Idaho, Utah, and Colorado) milk production is steady. Industry contacts suggest the excess milk that has plagued the region through much of the spring has tightened up. They say the amounts of discarded or heavily discounted milk are less than the last few months. Manufacturers are running at or near capacity as they work to refill the food service pipeline, meet export sales commitments and fill government purchases.
Condensed skim is mainly going to dryers in the West. Inventories and sales are balanced.
Western cream is moving well as it is in high demand, especially from ice cream and cheese makers. At some localities, processors have stopped churning butter and are selling their cream. Due to the Memorial Day holiday, cream supplies were a bit heavy during the past weekend up to the beginning of this week, but it went back to being balanced to tight afterward. According to contacts, a few loads of cream are still selling below flat market prices. However, generally, cream multiples for all Classes have increased at both ends of the range. Western U.S., F.O.B. Cream Multiples Range - All Classes: 0.9000 - 1.3800