Fluid Milk and Cream - Western U.S. Report 26
Farm milk production in California is at seasonally low levels. Contacts say that milk supplies are tight, and spot prices are trending higher. As the result, a few Class III producers cannot afford current milk prices and are planning to reduce their daily operations. Class I sales are steady. There are no spot loads available this week. Current hay prices in California are lower compared to last year at the same period, making California prices some of the lowest in the country.
With warmer climatic conditions in Arizona, milk output is seasonally low. Steady flow of milk is going to bottlers' accounts, whereas sales to Class II and III have kept the same strength as in the previous week. Arizona is self-sufficient in fulfilling the milk needs of instate buyers. However, there is a bit of concern about milk availability throughout the whole summer season. A small decline in milk yield occurred in New Mexico this week, but milk volumes available to processors are on the high end. This is due to unscheduled repairs that disrupted normal activities, leaving more milk holdovers that need room for processing. Class I, II and III intakes all increased, but the highest growth comes from cheese processors. Trailer usages for milk rerouting to various plants were critical this week. Luckily, handlers were able to take the necessary actions to ensure that no milk goes to waste.
Pacific Northwest milk production has come back a little in accordance with favorable cow comfort weather. There is plenty of milk available for processing and many of the manufacturing facilities are full. However, some processors suggest milk components are not following the same trajectory and are down somewhat. Bottling demand is at seasonal levels and steady. Milk handlers are preparing for the upcoming holiday week. Some manufacturers and bottlers are shortening processing schedules, but handlers do not expect too much strife to find homes for the milk.
Milk production in the mountain states of Idaho, Utah and Colorado is strong. While parts of the region have passed the annual spring high tide for milk production, favorable weather in Idaho continues to push output slightly higher. Spring flush often reaches its apex during July in Idaho. Industry contacts report a few spot loads of milk are available at $5.50 below Class IV. Manufacturers are at or near full capacity and any little disturbance will create a few distressed loads. Hay harvest is progressing in earnest. Industry contacts do not expect any forage issues in the near term.
Condensed skim obtainability varies by western localities. Several processors are looking to buy additional loads from outside of their states; others mentioned that availability is not an issue. Cream inventories are still tight in the West. Many processors are using all the cream available to them in-house, but some of their churns remain idle.
Very few loads of cream are trading in the low $1.10 range. Some buyers report being turned down at prices in the 1.20 range. National Retail Report Dairy ± Fluid Milk Summary Advertised Prices at Major Retail Supermarket Outlets ending during the period of 6/21/19 to 6/27/2019 Half Gallon, All Fat Tests Weighted Average Price National This Period Last Week Last Year Conventional $1.35 $2.22 $1.71 Organic $4.47 $3.87 $3.39 Regional (Conventional) Wtd. Ave. Low High Southwest $1.99 $1.99 $1.99 Regional (Organic) Wtd. Ave. Low High Northwest $4.89 $4.39 $5.39 Southwest $3.25 $2.99 $3.50 Gallon, All Fat Tests Weighted Average Price National This Period Last Week Last Year Conventional $2.70 $2.86 $2.74 Organic $5.81 $6.77 $3.98 Regional (Conventional) Wtd. Ave. Low High Northwest $1.99 $1.99 $1.99 Southwest $2.62 $2.49 $2.70 Regional (Organic) Wtd. Ave. Low High Northwest $5.00 $5.00 $5.00 Western U.S., F.O.B. Cream Multiples Range - All Classes: 1.1200 - 1.2800