Fluid Milk and Cream - Western U.S.

Feb. 21

     In California, milk output is following seasonally strong tendency. However, with the recent
     heavy and consistent rains, some industry participants are suggesting that milk output might
     curve as weeks go by if weather conditions don't change.
Meanwhile, balancing schedules remain full. Fluid milk demand has been steady for several weeks. Arizona fluid milk demand is stable along cyclical lines. Class IV sales are stable, compared to the previous week. Some producers are opting to churn their cream in lieu of selling it. Milk production is within expectations and handlers are managing their milk supplies within the state. Processing facilities are running at or close to full capacities. In New Mexico, more milk is moving into cheese vats. Class I orders have improved this week, but Class II requests have come down a bit. Minor repair and maintenance works continue to derail milk processing schedules. However, handlers have set up back up hauling capacities to move the excess of milk to facilities that can take on extra loads. This week, milk production is mostly stable. Milk production and hauling in the Pacific Northwest are slowly getting back to normal following the large winter storms last week. Industry contacts say irregular load deliveries are still creating challenges for some manufacturing. Milk handlers are trying to best resume normalcy in order to balance out the milk intakes. Some road conditions in the Cascades are slowing shipments of milk. Bottling demand has returned to seasonal levels, but milk processors are working to catch up and refill the bottled milk pipelines. A large dairy farm held a liquidation sale this week. Dairy contacts say favorable replacement cow prices were not always enough to entice dairy farmers, cautious from years of low milk prices, to make purchases. Significant portions of the liquidated herd were sent to slaughter or sold at beef market prices. Milk production in the mountain states of Idaho, Utah and Colorado is seasonally steady. Industry contacts suggest that because cull cow prices are not attractive, some dairy farmers are choosing to hang onto cows and not moving them out. However, industry contacts also report that a few farmers purchased cattle at a recent herd dispersal sale in order to clean up their own herd or cycle cows through the end of their lactations. Manufacturers report plenty of milk available for processing and many facilities are running at or near full capacity. Milk intakes are in relatively good balance with only a few loads being discounted and looking for processing homes. The snow pack is building and dairy farmers are growing more confident that water for irrigation will be readily available come spring. Condensed skim is still actively flowing into Class III and ice cream production. Influx of condensed skim from other states to California continues. Cream usage for Class II production needs has started to increase in preparation for the upcoming holiday. Nonetheless, many loads of cream continue to find their way to the churns. Cream multiples for all Classes remains at 1.00-1.15. National Retail Report Dairy ± Fluid Milk Summary Advertised Prices at Major Retail Supermarket Outlets ending during the period of 2/15/19 to 2/21/2019 Half Gallon, All Fat Tests Weighted Average Price National This Period Last Week Last Year Organic $3.97 $3.98 $4.19 Conventional $2.26 $1.54 $2.56 Regional (Conventional) Wtd. Ave. Low High Northwest $2.59 $2.59 $2.59 Southwest $2.31 $1.99 $2.50 Regional (Organic) Wtd. Ave. Low High Northwest $3.59 $2.50 $3.99 Southwest $3.99 $3.99 $3.99 Gallon, All Fat Tests Weighted Average Price National This Period Last Week Last Year Organic $4.70 $5.62 $6.26 Conventional $3.40 $2.60 $2.96 Regional (Conventional) Wtd. Ave. Low High Northwest $2.75 $2.50 $2.99 Southwest n.a. n.a. n.a. Regional (Organic) Wtd. Ave. Low High Northwest n.a. n.a. n.a. Southwest n.a. n.a. n.a. Western U.S., F.O.B. Cream Multiples Range - All Classes: 1.0000 - 1.1500 Information for the period February 18 - 22, 2019, issued weekly Secondary Sourced Information: Milk pooled on the Pacific Northwest Order 124 totaled 769.9 million pounds in January 2019. Class I utilization accounted for 20.4 percent of producer milk. The uniform price was $15.15, up $0.19 from last month, and $0.83 above the same month a year ago. Milk pooled on the Arizona Order 131 totaled 445.9 million pounds in January 2019. Class I utilization accounted for about 24.6 percent of producer milk. The uniform price was $15.60, up $0.30 from last month, and $1.04 above the same month a year ago. The NASS Milk Production report noted December 2018 milk production in the 23 selected states was 17.1 billion pounds, 0.9 percent above a year ago. Milk cows in the 23 selected states totaled 8.72 million head, 21,000 head less than a year ago. The following table shows western states included in the report and the monthly milk production changes compared to a year ago: December 2018 Milk Production, (USDA-NASS) (Million Lb.) % Change From 1 Year Ago Arizona 422 - 1.4 California 3425 + 1.7 Colorado 391 + 6.0 Idaho 1265 + 4.9 New Mexico 670 - 2.8 Oregon 217 + 4.3 Utah 192 + 2.1 Washington 567 + 4.8

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