FLUID MILK AND CREAM REVIEW – WEST
(USDA Market News)
California milk production has started its downfall in that many manufacturers have reached their peak production levels in the past weeks. Nonetheless, milk supplies are still more than enough to meet all processing requirements.
In the quest for additional processing capacities, some milk continues to move out-of-state. Milk intakes from bottlers have not changed much from the previous week.
Arizona milk output is in line with normal seasonal output levels for this time of the year. With the state being in the peak of the spring flush, milk loads available for processing are abundant. Manufacturers are working at full schedules and managing well the milk supplies. Some loads of milk continue to move to other regions for processing. Milk intakes from the retail sector, as well as restaurants, are steady.
In Arizona, alfalfa conditions are 81 percent good to excellent this week compared to 79 percent last week.
New Mexico milk market undertone seems steady. Although production is slightly down, loads of milk are readily available to fulfill all processing obligations. Most plants are working at or near to full capacities. Class I sales are steady to slightly lower, but Class II demand is slightly up. Milk going into cheese production is up. Alfalfa hay conditions are currently 39 percent good to excellent compared to 38 percent last week.
New Mexico is defined as 99 percent abnormally dry or worse.
Pacific Northwest milk volumes are hitting expected levels. Milk production is following seasonal patterns with a steady climb into spring flush.
However, cool weather has dampened heavy milk usage for ice cream manufacturing and delayed the grilling season. Some milk is pushing into the region from surrounding states. Dairy manufacturers report plenty of milk for most dairy processing.
In the mountain states of Idaho, Utah and Colorado, industry contacts say milk production is coming on strong. In the southern reaches of the region, the flush is at hand. And in the north, some contacts feel there may be an early flush in areas that normally do not see peak production until early July. Although milk is in oversupply, and some milk is spilling over into surrounding regions, milk handlers say the loads are finding homes with manufacturers.
Area dairy contacts say water reservoirs have been adequately recharged and, barring any unforeseen weather events, they expect forage and hay costs will stay relatively low.
Western condensed skim processing is active as milk loads that need to be cleared remain plentiful. Cream supplies in the West are adequate to meet all manufacturing obligations.
Ice cream producers are taking more loads of cream. Butter churning is still strong as well. Cream multiples for all Classes range from 1.00 to 1.24.
According to the DMN National Retail Report-Dairy for the week of April 6-12, the national weighted average advertised price for one gallon of milk is $2.67, down $0.82 from last week, but up $0.22 from a year ago. The weighted average regional price in the Southwest is $2.42 with a price range of $1.99-$2.79. The weighted average regional price in the Northwest is $1.99 with no price range.
According to California Department of Food and Agriculture, May 2018 Class 1 prices in California are $16.09 in the North and $16.36 in the South. The statewide average Class 1 price based on production is $16.10. This price is up $0.11 from the previous month, but $.57 lower than a year ago.