Fluid Milk and Cream — Western U.S.

May 9

Milk production in California is steady to a bit down. Many farmers have reached the peak of
     their milk production and are expecting a decline in output in the coming weeks. Milk
     supplies remain abundant for all manufacturing needs throughout the state. Fluid milk demand
     is steady to somewhat up according to market participants. In Arizona, a good volume of milk
     is flowing from the farm to processing plants. However, milk outputs are currently lower
     than last year at the same period. Therefore, processors fear that in the summer, cream and
     milk supplies available to them might become tighter than in previous years. Class II
     handling is ongoing as producers plan for summer ice cream needs. Class I demand is
     unchanged from the previous week. Class IV and III processing is active. In New Mexico, milk
     off the farms is accessible to all customers. Demand is in good balance with supplies. The
     different classes of milk are moving steadily to their intended processing facilities.
     Nevertheless, Class II interest seems a little higher than the other Classes of milk. The
     spring flush is about to end soon in New Mexico. Milk production in the Pacific Northwest is
     trending higher. Class I sales are slightly higher, even as some educational institutions
     approach the end of their school terms. Manufacturers are not having any real trouble
     getting the milk needed for processing. A few discounted loads of milk are coming into the
     region from neighboring states. Milk production in the mountain states of Idaho, Utah and
     Colorado is steady. Many of the manufacturers have plenty of milk to keep plants running at
     or near capacity. However, a few hiccups at facilities have created minor disruptions to
     milk flows, pushing some milk into surrounding states. A few loads were discounted to $3 to
     $4 below Class to help them move. Condensed skim is plentiful in the West, and it is moving
     across state borderlines to satisfy market demand. While the majority of condensed skim is
     finding its way to the dryers, some loads are going to ice cream processing. Cream supplies
     are slightly firmer this week, but continue to be accessible to dairy market participants.
     Butter processing is active, though some cream is being channeled toward the making of ice
     cream. Cream multiples remain at 1.10 to 1.22.

     National Retail Report Dairy ± Fluid Milk Summary
     Advertised Prices at Major Retail Supermarket Outlets ending during the
     period of 5/3/19 to 5/9/2019

     Half Gallon, All Fat Tests                   Weighted Average Price
     National                          This Period       Last Week      Last Year
      Organic                             $3.87            $3.73          $3.85
      Conventional                        $1.16            $1.45          $1.97

     Regional (Conventional)            Wtd. Ave.           Low            High
      Northwest                            n.a.             n.a.           n.a.
      Southwest                            n.a.             n.a.           n.a.

     Regional (Organic)                 Wtd. Ave.           Low            High
      Northwest                           $4.00            $4.00          $4.00
      Southwest                           $2.97            $2.49          $4.00

     Gallon, All Fat Tests                        Weighted Average Price
     National                          This Period       Last Week      Last Year
      Organic                             $6.99            $5.00          $5.85
      Conventional                        $2.51            $3.16          $2.51

     Regional (Conventional)            Wtd. Ave.           Low            High
      Northwest                           $1.99            $1.99          $1.99
      Southwest                           $2.49            $2.49          $2.49

     Western U.S., F.O.B. Cream
     Multiples Range - All Classes:               1.1000 - 1.2200

     Information for the period May 6 - 10, 2019, issued weekly

     Secondary Sourced Information:

     Dairy Products Report - Ice Cream, Regular, Hard
     Released May 2, 2019, by the National Agricultural Statistics Service (NASS), Agricultural
     Statistics Board, United States Department of Agriculture (USDA).

     Ice Cream, Regular (Hard) Production ± States and United States: March 2018 and 2019
                                   Monthly Production (1000 pounds)    Percent Change from
     Total Cream, Regular (Hard)       March   February    March          March  February
     Region                             2018      2019      2019           2018     2019
     United States                    63,553    52,120    65,559            3.2     25.8

     Atlantic                         13,996    12,447    14,239            1.7     14.4
       Pennsylvania                    3,138     2,631     3,345            6.6     27.1

     Central                          36,967    30,099    39,782            7.6     32.2
       Missouri                        3,811     2,965     3,403          -10.7     14.8
       Ohio                            2,227     1,721     1,897          -14.8     10.2

     West                             12,590     9,574    11,538           -8.4     20.5
       California                      6,480     4,337     6,037           -6.8     39.2
       Oregon                          1,222       980     1,317            7.8     34.4
       Utah                            2,849     2,276     1,949          -31.6    -14.4

     Ice Cream, Regular (Hard) ± Cumulative Production February - March
                                  Cumulative Production  Percent Change
                                        (1000 pounds)        from
     Report Month                       2018     2019        2018
     March                           172,684  171,230        -0.8

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