Fluid Milk and Cream — Western U.S.

With the holiday in the loop, more demand for Class II milk is emerging as sour cream, cream cheese, and egg nog output levels are picking up.

Published on November 10, 2018 3:50AM


FLUID MILK AND CREAM

REVIEW – WEST

(USDA Market News)

Nov. 8

In California, milk production is unchanged from the previous week. Supplies are largely sufficient to meet buyers’ requests. With the holiday in the loop, more demand for Class II milk is emerging as sour cream, cream cheese, and egg nog output levels are picking up.

Class I sales are steady. Some cream from California is moving to other regions of the country to help fulfill processing obligations.

Overall, the market tone is balanced.

In Arizona, cooler weather conditions are helping with milk production. Because cows are getting comfortable with the present climate, they are producing more milk.

Nonetheless, all the milk is being used efficiently as milk demand for the holiday specialty products preparation is higher. Class I and IV demands are stable. Minor repair and maintenance workloads at a plant did not affect much processing activities.

New Mexico milk yield is steady this week. While some plants are down for maintenance, and reduced their intakes, handlers quickly found other processors who needed the extra milk.

The Southeast market demand for milk remains strong. Southeastern haulers are still going to New Mexico to pick up some loads of milk. In New Mexico, Class I milk needs have decreased while Class II and III requests moved up.

Overall, there is a good equilibrium between supplies and demand of milk.

Pacific Northwest milk intakes are mixed. While there is still plenty of milk for bottling and processing needs, farm milk production is generally following the typical seasonal declines. In some parts of the region, weather patterns have been favorable for cow comfort and milk handlers see small jumps in production on certain days.

Milk production in the mountain states of Idaho, Utah and Colorado is mostly following typical seasonal patterns. Manufacturers still report plenty of milk for processing and some loads of milk are moving into neighboring states to find homes.

The continued financial stress is taxing the sinews of the dairy farming community. A few farms will lose markets for their milk at the end of the year and some industry contacts suggest culling is increasing in parts of the region. Condensed skim demand hasn’t changed from a week ago. Inventories are available to meet processing needs.

Western cream supplies are mostly balanced with demand, although a bit of tightness has been noted. More of the cream is being used for holiday food manufacturing.

As the result, butter makers have to compete with Class II processors to get the volumes of cream required for churning. Midwest buyers continue to source their cream needs from the western region. Cream multiples for all Classes are 1.10-1.35.

Advertised Prices at Major Retail Supermarket Outlets ending during the period of Nov. 2-8:

Half Gallon, All Fat Tests

Organic: $3.83

Conventional: $1.82

According to the California Department of Food and Agriculture, the October 4a price (butter/powder) in California is $14.49, up $0.40 from the previous month, but down 0.02 from a year ago. This compares to the Federal Order Class IV price of $15.01 for October.

The October 4b price (cheese) is $15.43 down $0.19 from the previous month, and $0.74 lower from a year ago. This compares to the Federal Order Class III price for October at $15.53.



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