Fluid Milk and Cream — Western U.S.

March 21

     California milk production is inching up and dairy product manufacturers are staying busy,
     running their dryers near full performance levels. Overall, milk intakes are consistent with
     previous years' levels. The processing of the holiday dairy products is slowly ramping up.
     Retail milk orders and bottled milk demand are unchanged from a week ago. In Arizona milk
     production is going to the satisfaction of dairy farmers. Milk supplies are adequate to
     fulfill all end users' needs. Dryers are kept at full or close to full manufacturing
     capacities. Butter churning remains active. With a few schools on spring break or just
     coming back from spring break, there is less milk moving into Class I accounts. The storms
     and high winds in some parts of New Mexico have caused some disruptions in milk processing
     toward the end of last week. This week, milk processing activities are back to normal aside
     from minor milk diversions from their original delivery destinations to other plants. Milk
     production is generally flat to a bit up in the state. Class II and III sales are up,
     whereas Class I demand is somewhat lower. Pacific Northwest milk production is rebounding
     and increasing as spring issues into the region. Most processing facilities have plenty of
     milk. Manufacturers are running near full capacity. A few processors, however, report
     intakes are off a bit due to herd dispersal sales or remaining herd health issues from the
     winter storms last month. Bottling demand is stable. Milk production in the mountain states
     of Idaho, Utah and Colorado is strong. Intakes are in balance with processing needs, and
     most milk can find a home nearby. Discounted milk loads are not widely available. Initial
     reports out of Colorado suggest that last week¶s winter storm did not result in significant
     losses of milk cows. However, due to blizzard conditions and closed roads, some farms missed
     milk pickups and had to dispose of several tanker loads of milk. There was a very little
     change to condensed skim availability throughout the West. With current strong milk output,
     condensed skim is in good supply. Cream supply is adequate is the West. According to
     industry contacts, ice cream production is set to soon ramp up; therefore, cream demand will
     likely increase. Cream cheese manufacturing is also active ahead of the holiday. Currently,
     cream sales are stable and great price discounts are not easily found. Cream multiples for
     all Classes are 1.05-1.18.

     National Retail Report Dairy ± Fluid Milk Summary
     Advertised Prices at Major Retail Supermarket Outlets ending during the
     period of 3/15/19 to 3/21/2019

     Half Gallon, All Fat Tests                Weighted Average Price
     National                         This Period    Last Week     Last Year
      Organic                           $4.09         $3.61          $3.76
      Conventional                      $2.29         $2.39          $2.56

     Regional (Conventional)          Wtd. Ave.        Low           High
      Northwest                         $2.69         $2.69          $2.69
      Southwest                         $1.99         $1.99          $1.99

     Regional (Organic)               Wtd. Ave.        Low           High
      Northwest                         $2.50         $2.50          $2.50
      Southwest                         $3.90         $3.49          $3.99

     Gallon, All Fat Tests                     Weighted Average Price
     National                         This Period    Last Week     Last Year
      Organic                            n.a.         $4.99          $6.04
      Conventional                      $2.81         $2.70          $2.55

     Regional (Conventional)          Wtd. Ave.        Low           High
      Northwest                         $2.75         $2.50          $2.99
      Southwest                         $1.99         $1.99          $1.99

     Regional (Organic)               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                          n.a.          n.a.           n.a.
      Southwest                          n.a.          n.a.           n.a.

     Western U.S., F.O.B. Cream
     Multiples Range - All Classes:               1.0500 - 1.1800


     Information for the period March 18 - 22, 2019, issued weekly

     Secondary Sourced Information:

     Milk pooled on the Pacific Northwest Order 124 totaled 604.4 million pounds in February
     2019. Class I utilization accounted for 23.0 percent of producer milk. The uniform price was
     up $0.13 from last month, and $1.62 above the same month a year ago.

     Milk pooled on the Arizona Order 131 totaled 413.7 million pounds in February 2019. Class I
     utilization accounted for about 23.6 percent of producer milk. The uniform price was up
     $0.16 from last month, and $1.85 above the same month a year ago.

     The NASS Milk Production report noted February 2019 milk production in the 23 selected
     states was 16.0 billion pounds, 0.6 percent above a year ago. Milk cows in the 23 selected
     states totaled 8.72 million head, 47,000 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:

     February 2019 Milk Production, (USDA-NASS)

                   (Million Lb.)   % Change From
                                     1 Year Ago

     Arizona           402            - 3.4
     California       3235            + 0.1
     Colorado          365            + 8.3
     Idaho            1162            + 2.1
     New Mexico        634            - 3.9
     Oregon            205            + 7.3
     Utah              176            + 1.1
     Washington        509               -

     Dairy Products Report - Ice Cream, Regular, Hard
     Released March 14, 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: 2018 and 2019
                                 Monthly Production (1000 pounds)     Percent Change from
     Total Cream, Regular (Hard)   January    December   January       January   December
     Region                           2018        2018      2019          2018       2018
     United States                  54,718      43,687    52,994          -3.2       21.3

     Atlantic                       12,192      11,257    12,224           0.3        8.6
       Pennsylvania                  2,881       3,831     2,697          -6.4      -29.6

     Central                        32,880      25,296    31,763          -3.4       25.6
       Missouri                      4,315       1,852     1,852         -57.1        0.0
       Ohio                          2,018       1,960     2,139           6.0        9.1

     West                            9,646       7,134     9,007          -6.6       26.3
       California                    4,800       2,959     4,390          -8.5       48.4
       Oregon                          894       1,141     1,258          40.7       10.3
       Utah                          2,166         905     1,499         -30.8       65.6

     Ice Cream, Regular (Hard) ± Cumulative Production January - January
                       Cumulative Production   Percent Change
                           (1000 pounds)            from
     Report Month          2018        2019         2018
     January             54,718      52,994         -3.2

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