FLUID MILK AND CREAM
REVIEW – WEST
(USDA Market News)
California milk production is active this week, following typical seasonal output levels for this time of the year. Balancing pressure is slowly declining in response to slight drops in milk volumes produced.
Some milk is still finding its way out of California to meet tight processing deadlines. Class 1 sales as well as the retail sector sales are flat. According to some contacts, water reservoirs in California are beyond the previous year’s levels.
The last winter’s record rain as well as the last snows have brought the reservoirs to 80 percent of normal. Milk production is slowly dropping in Arizona as the state’s climate is warming up and cows are starting to feel the heat. The weather has also been dry and windy to the point where there is a red flag warning for potential fires.
Milk supplies are enough to meet all manufacturing needs. Some processors are doing preventive repairs/maintenance work as well as managing incoming milk loads. Bottling milk intakes have remained steady. Due to aphids and erratic weather conditions, the yields on the first two cuttings of alfalfa hay were low in southern California and in Arizona.
In New Mexico, milk holdovers are increasing again because maintenance and cleaning schedules have disrupted normal processing schedules. Milk production is slightly up.
However, sales are mixed across the Classes of milk. Class I sales are down, but intakes into Class II are up. Class III demand has not changed much from a week ago.
The sales of some dairies in California and in other western states did not have much effect on the alfalfa hay market because of tight supplies. In the West, the acres used to grow alfalfa hay are down by 2 percent. Therefore, some market participants believe this will negatively impact 2018 alfalfa hay production.
Milk production is generally well-balanced with processing needs in the Pacific Northwest. Cow comfort has not been an issue. Even though cool, wet weather covers the region, milk volumes are following seasonal patterns. Bottling demand is steady.
Milk production in the mountain states of Idaho, Utah and Colorado remains strong. Even with the flush at hand in the southern part of the region, loads of milk from surrounding states are finding their way to processors. Milk volumes are climbing steady in the northern areas of the region. Industry contacts are anticipating an early flush. Massive volumes of condensed skim continue to clear into nonfat dry milk.
Western cream demand has ticked up a bit. Cream availability is good, but not as overwhelming as a few weeks ago. Adverse weather conditions are influencing ice cream makers’ intakes of cream. Butter producers are still churning, but some have reduced their churning schedules. Cream multiples for all usages range from 1.03 to 1.24.
According to the DMN National Retail Report-Dairy for the week of April 13-19, the national weighted average advertised price for one gallon of milk is $2.35, down $0.32 from last week, and down $1.43 from a year ago. The weighted average regional price in the Southwest is $2.45 with a price range of $2.29-$2.49. The weighted average regional price in the Northwest is $2.58 with a price range of $1.99-$2.99.
Milk pooled on the Arizona Order 131 totaled 441.6 million pounds in March 2018. Class I utilization accounted for about 25.1 percent of producer milk. The uniform price was $14.02, up $0.11 from last month, but $2.00 below one year ago.
Milk pooled on the Pacific Northwest Order 124 totaled 635.0 million pounds in March 2018. Class I utilization accounted for about 25.3 percent of producer milk. The uniform price was $13.88, up $0.22 from last month, but $2.05 below one year ago.