Fluid Milk and Cream - Western U.S. Report 24

In California, milk output is slightly lower. As a result, supplies have not been sufficient to meet all purchasing requests despite the facts that demands haven't changed much from pre-coronavirus levels. Several buyers are looking to purchase additional loads on the spot market. Some are saying that it is difficult to bring in out-of-state milk. Class I demands are flat, whereas Class II sales are a bit up. Ice cream makers are requesting more raw milk.

Arizona farm milk production is level. Milk components have also declined. Bottled milk sales are unchanged from last week. Class III milk orders have increased. Processors report not having to send any milk out-of-state. They are not also receiving any milk coming from other states. Milk supplies within Arizona are well balanced with buyers' needs. Overall, the market tone is unchanged from a week ago.

In New Mexico, milk production has somewhat increased this week, but overall, demands have declined. Class I and III sales are lower, whereas Class II demands are trending up. A few Class III processing plants couldn’t take their usual loads because of machine repairs. This resulted in an uptick in milk holdovers. Balancing needs are rampant.

Pacific Northwest milk intakes are in good balance with processing needs. Industry contacts say very little, if any, milk or cream has left the immediate area to find a home. Farm output is steady. Overbase programs have kept milk production in check. Demand for fluid milk and cream has increased and Class II processors are seeking out seasonally higher volumes of milk and cream. In some cases, ice cream or other Class II manufacturers, eager to fill production runs, are willing to pay well above published multiples for partial loads of cream. In other cases, such as last weekend, a few cream handlers discounted a few orphaned partial loads of cream to get them to move. Manufacturers are running near full capacity and have plenty of milk for their needs. Bottling demand is steady.

Milk production in the mountain states of Idaho, Utah, and Colorado is seasonally heavy, but excess milk has diminished in recent weeks. Cheese plants are pulling heavy volumes of milk, leaving a little less for balancing plants. Industry contacts report some spot milk loads are priced at $3 below lass IV.

Condensed skim availability has declined a bit. Several customers are looking to buy spot loads, but can't always get what they need.

In the West, the cream market is strong. Ice cream and cheese makers continue to take the majority of cream sold in the spot market. A few butter processors have stopped their churns as it is more advantageous for them to sell their cream instead of churning it. The cream multiple range for all Classes is wider this week. A few situational sales took place at multiples above and below the range. Western U.S., F.O.B. Cream Multiples Range - All Classes: 1.1300 - 1.3500 Information for the period June 8 - 12, 2020, issued weekly Secondary Sourced Information: Dairy Products Report - Ice Cream, Regular, Hard Released May 5, 2019, by the National Agricultural Statistics Service (NASS), Agricultural Statistics Board, United States Department of Agriculture (USDA). Ice Cream, Regular (Hard) Production – States and United States: March 2019 and 2020 Monthly Production (1000 Gallons) Percent Change from Total Cream, Regular (Hard) March Feb March March Feb Region 2019 2020 2020 2019 2020 United States 65,957 52,484 64,026 -2.9 22.0 Atlantic 14,258 11,984 13,812 -3.1 15.3 Pennsylvania 3,351 3,419 3,294 -1.7 -3.7 Central 40,062 31,759 39,176 -2.2 23.4 Missouri 3,403 2,907 3,222 -5.3 10.8 Ohio 2,011 1,839 2,111 5.0 14.8 West 11,637 8,741 11,038 -5.1 26.3 California 6,196 4,312 5,491 -11.4 27.3 Oregon 1,307 1,017 1,422 8.8 39.8 Utah 1,927 1,627 2,125 10.3 30.6 Ice Cream, Regular (Hard) – Cumulative Production: January-March Cumulative Production Percent Change (1000 Gallons) from Report Month 2019 2020 2019 March 172,390 168,667 -2.2

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