Fluid Milk and Cream — Western U.S.
In California, the outbreak of COVID-19 is not much affecting the supplies of milk. Several plant managers report having plenty of milk along with plant issues. Milk production is strong, and the spring flush started earlier this year.
Industry contacts are wondering if milk volumes will peak sooner or lead to a longer, steeper peak flush.
Despite the closing of most schools in the state, retail sales of milk have been increasing as households continue to secure enough milk for future use. As a result, Class I demand is a bit up.
Some processors are limiting outlets for whole raw milk and are focusing on moving condensed skim out of the state.
Milk yield is solid in Arizona. Sales are stable. Processing capacities are being fully utilized, and some producers are receiving unsolicited offers of milk. From time to time, they take a few loads if the price is affordable.
In New Mexico, milk production and supplies have increased. Balancing needs are also higher despite increased milk intakes from Class I and Class III. Class II demands are stable to slightly lower. Repair and maintenance projects are affecting how many milk loads some plants can take.
Like in most other states, milk demands from educational institutions have dropped, but were offset by increased intakes from retailers. So far, no major logistic issues have arisen.
Milk production in the Pacific Northwest remains strong, but increases in overbase program penalties have helped level off milk intakes. Milk handlers report educational and food service milk sales have dried up, but there has been a surge in retail gallon demand as citizens stock up and hunker down amid the coronavirus pandemic. Most bottling and manufacturing facilities are running near capacity to keep up with the energized retail demand.
Industry contacts say they have not experienced any issues with milk collection, transportation or processing, but are constantly monitoring the situation.
In the mountain states of Idaho, Utah, and Colorado, milk intakes are in better balance with consumer demand. Industry contacts report that strong Class I and Class II sales have helped rebalance milk supplies, at least for the moment. Milk production is still above processing capacity and some spot loads are getting pushed out of the region. But while spot milk loads are attainable, the volume of discounted loads is lower.
Most manufacturers have told office workers to work from home in accordance with social distancing efforts.
Western condensed skim sales are mostly steady, but continue to be less than expected for some processors.
Finding spot buyers is challenging because many manufacturing plants are already full.
Several plant managers are looking to sell condensed skim out of state to keep their supplies at comfortable levels.
The cream market is balancing out in the West. Supplies are available to all buyers. Cream multiples for all Classes are a bit higher this week.
National Retail Report
Advertised Prices at Major Retail Supermarkets.
Half Gallon, All Fat Tests Weighted Average Price