Fluid Milk and Cream — Western U.S.

Aug. 8

In California, milk supplies are at low points. Production is steady to declining, but
     processing continues to take place as planned. Milk components are seasonally down. Bottled
     milk demand has starting to increase in preparation for the new school year. Arizona milk
     volumes off the dairy farms are declining more than usual for this time of the year. The
     humidity caused by the monsoon is partly the reason for the declines. More milk is going to
     schools' accounts, keeping handlers busy. Out-of-state milk is also flowing into Arizona as
     processors manage to get the additional milk needed for their day-to-day activities, while
     at the same time helping another state meet their balancing needs. Milk supply in New Mexico
     is down from a week ago. There was a slight uptick on balancing needs at the beginning of
     the week, but it has subsided. Class I and III demands are up, whereas Class II milk is
     moving steadily to processing facilities. Class IV manufacturing has slowed down a bit.
     Overall, the market tone is steady. Strong milk production continues in the Pacific
     Northwest. Although intakes have eased back slightly, there is plenty of milk available for
     most processing needs. Bottling demand is steady. Aside from some scheduled and unscheduled
     maintenance, many manufacturers are running near full schedules. Idaho, Utah and Colorado
     milk production continues near peak levels. While milk production has eased back in the
     southern parts of the region, Idaho milk outputs are still near flush levels. Manufacturers
     are mostly full and are unable to take on much, if any, additional milk. Any disruption to
     the milk flow quickly causes gluts in the pipeline. Discounts of $4 to $5 under Class are
     common for backed up milk to get it to move. Industry contacts do not think there has been
     any milk dumped recently. Schools within the region start sessions in the next two weeks,
     and contacts expect bottling to relieve some of the pressure on the milk supply. Cheese
     processors' intakes of condensed skim have augmented in some parts of the West, but loads
     are still available for nonfat dry milk production. There remain heavy pulls of cream going
     to the making of ice cream. Some plants have either decreased their butter output or
     refrained from producing it altogether. Cream multiples for all Classes have moved up by
     .0100 on both ends of the range.

     National Retail Report Dairy ± Fluid Milk Summary
     Advertised Prices at Major Retail Supermarket Outlets ending during the period of 8/2/2019
     to 8/8/2019

     Half Gallon, All Fat Tests   Weighted Average Price
     National                This Period  Last Week  Last Year
      Conventional              $2.27      $1.79      $2.18
      Organic                   $3.61      $3.63      $3.90

     Regional (Conventional)   Wtd. Ave.    Low       High
     Southwest                  $2.69      $2.69      $2.69

     Regional (Organic)        Wtd. Ave.    Low       High
     Northwest                  $3.40      $2.79      $3.99
     Southwest                  $3.53      $2.99      $3.99

     Gallon, All Fat Tests        Weighted Average Price
     National                This Period  Last Week  Last Year
      Conventional              $3.16      $2.45      $2.68
      Organic                   $5.11      $5.47      $5.55

     Regional (Conventional)   Wtd. Ave.   Low        High
     Northwest                  $1.99      $1.99      $1.99
     Southwest                  $2.79      $1.99      $2.99

     Regional (Organic)        Wtd. Ave.    Low        High
     Northwest                  $5.00      $5.00      $5.00
     Southwest                  $5.98      $5.98      $5.98

     Western U.S., F.O.B. Cream

     Multiples Range - All Classes:               1.1600 - 1.3200


     Information for the period August 5 - 9, 2019, issued weekly

     Secondary Sourced Information:

     Dairy Products Report - Ice Cream, Regular, Hard
     Released August 1, 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: June 2018 and 2019
                                   Monthly Production (1000 pounds)    Percent Change from
     Total Cream, Regular (Hard         June      May      June           June      May
     Region                             2018     2019      2019           2018     2019
     United States                    70,263   64,194    65,495           -6.8      2.0

     Atlantic                         14,795   13,833    13,701           -7.4     -1.0
       Pennsylvania                    3,530    3,361     3,412           -3.3      1.5

     Central                          42,174   37,083    40,561           -3.8      9.4
       Missouri                        3,889    3,219     3,335          -14.2      3.6
       Ohio                            2,578    2,636     2,443           -5.2     -7.3

     West                             13,294   13,278    11,233          -15.5    -15.4
       California                      6,785    7,269     5,800          -14.5    -20.2
       Oregon                          1,377    1,500     1,261           -8.4    -15.9
       Utah                            3,033    2,222     2,047          -32.5     -7.9

     Ice Cream, Regular (Hard) ± Cumulative Production January - June
                                 Cumulative Production  Percent Change
                                        (1000 pounds)      from
     Report Month                       2018     2019      2018
     June                            370,319  364,900      -1.5

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