FLUID MILK AND CREAM REVIEW – WEST
(USDA Market News)
Throughout the state of California, farm milk production is steady this week. Milk continues to move out of state as some plants work on repair and maintenance issues. Due to the addition of a new plant in the state, a few processors report that some of their dairies are sending milk to the new plant.
However, they still have more than enough milk for processing needs.
Milk volumes are plenteous in the spot market. Class 1 intakes remain flat. Arizona milk supplies available for processing are ample. Manufacturers are worried that they might not have enough processing capacity for the spring flush milk outputs.
Fluid milk demand from grocery stores and schools holds steady. Demand for other Classes of milk to fill contractual needs seems steady.
Nonetheless, some plant managers have to take more loads of milk to help clear out excess milk.
In New Mexico, farm milk production is trending slightly up. However, repair/maintenance workloads are affecting intakes for the different Classes of milk.
Class I intakes are following normal patterns.
Class II sales are slightly down.
Class III demand varies by plants within the region.
Milk is also clearing out of the state to help with processing.
Pacific Northwest milk production continues to follow seasonal patterns. Milk intakes are in good balance with processing needs and there are sufficient volumes of milk. Bottling demand is steady. Some industry contacts report ice cream manufacturers are ramping up production runs.
In the mountain states of Idaho, Utah and Colorado, milk production is stable, but in some places output exceeds available processing capacity. A few industry contacts report discounted spot loads are readily available and some milk is getting shipped into neighboring states. Regional processors are running at or near capacity.
Farmers are bird-dogging reservoir and snowpack levels as they begin to plan for the next cropping season. Currently, contacts suggest reservoir levels are in pretty good shape, however snowpack is less than normal, especially in some southern parts of the
Available water only adds to the concern, as some farmers are faced with the possibility of not having a market for their milk in the months to come. As more milk is available in the West, so is condensed skim. Most of the condensed skim is clearing to nonfat dry milk.
Processors report a lack of adequate processing capacity in some areas. Cream inventories remain bountiful in the West. Multiples vary greatly from state to state, ranging from flat to 1.23.
According to the DMN National Retail Report-Dairy for the week of March 2-8, the national weighted average advertised price for one gallon of milk is $2.87, up $0.10 from last week, but down $0.24 from a year ago.
The weighted average regional price in the Southwest is $2.43 with a price range of $1.99-$2.79. The weighted average regional price in the Northwest is $1.59 with a price range of $.99 -$1.99.
According to the NASS Dairy Products report, hard ice cream production in the West region for January 2018 is 11.2 million gallons, 20.9 percent lower than a month ago, and 21.6 percent below the previous year.
The February 4a price (butter/powder) in California is $12.72, down $0.21 from the previous month, and $2.68 lower from a year ago. This compares to the Federal Order Class IV price of $12.87 for February. The February 4b price (cheese) is $13.38, up $0.01 from the previous month, but $2.43 lower from a year ago. This compares to the Federal Order Class III price for February at $13.40.