Fluid Milk and Cream — Western U.S.
Milk production in California is down, partly caused by hotter climatic conditions. Temperatures in some areas have reached 100 degrees this week, creating discomfort for dairy cows. Although milk loads are adequate within the state, there are apprehensions that it could become insufficient if output continues to drop. Class I sales are generally flat while Class II requests are strong into ice cream plants. In Arizona, the heatwave is ongoing, but cows get to recharge in the evening and early morning when the weather is a bit cooler. Therefore, milk production hasn¶t drop much in recent days. Manufacturing plants are not working at full capacities. Nonetheless, milk volumes are adequate for the fulfillment of all necessary processing obligations. Bottled milk demand is steady, but likely to increase as the needs to fill the pipelines for the upcoming school year arise. In New Mexico, Class I and III sales increased significantly while Class II demand is steady to declining. Overall, milk orders are trending higher, keeping the needs for balancing low. Milk production is somewhat down from the week before. Unscheduled repairs and maintenance at a Class III processing plant did not caused too much disruption to processing activities. The market tone is firm. Pacific Northwest milk production has remained at or near peak levels. Weather conducive to cow comfort and modern barns with good ventilation are making it possible to keep milk output volumes up. Manufacturers are very full of milk. Bottling demand is still in the summer processing mode because school starts are still mostly one month away. In the mountain states of Idaho, Utah and Colorado, milk production is very strong. There is plenty of milk for almost all processing needs. Any glitch in the milk logistics system causes milk to back up and discounted loads appear. Typical discounts are $4 to $5 under Class. School start ups are getting closer and bottlers are beginning to plan the refill of the school milk pipeline. In much of the region, educational institutions begin classes in mid-August. Condensed skim supplies are slightly lower in the West, but processing activities are taking place without any issue. The cream market in the West is firm. Although the majority of customers can get what they need, recent drops in milk volumes have raised concerns about the possibility that cream supplies could further tighten up, leading to cream order cancellations. Cream multiples are steady. National Retail Report Dairy ± Fluid Milk Summary Advertised Prices at Major Retail Supermarket Outlets ending during the period of 7/26/19 to 8/1/2019 Half Gallon, All Fat Tests Weighted Average Price National This Period Last Week Last Year Conventional $1.79 $1.95 $2.07 Organic $3.63 $3.49 $4.64 Regional (Conventional) Wtd. Ave. Low High Northwest $0.99 $0.99 $0.99 Southwest $1.69 $1.69 $1.69 Regional (Organic) Wtd. Ave. Low High Northwest $3.35 $2.79 $3.49 Southwest $3.64 $2.79 $4.49 Gallon, All Fat Tests Weighted Average Price National This Period Last Week Last Year Conventional $2.45 $2.80 $2.61 Organic $5.47 $5.45 $5.79 Regional (Conventional) Wtd. Ave. Low High Northwest $1.99 $1.99 $1.99 Southwest $2.84 $2.75 $2.98 Regional (Organic) Wtd. Ave. Low High Northwest $5.00 $5.00 $5.00 Southwest $5.00 $5.00 $5.00 Regional (Organic) Wtd. Ave. Low High Northwest $5.00 $5.00 $5.00 Southwest $5.00 $5.00 $5.00 Western U.S., F.O.B. Cream Multiples Range - All Classes: 1.1500 - 1.3100