Fluid Milk and Cream — Western U.S.

July 18

Class I orders are down in southern California, but up in the northern part of the state.
     The declines in sales were higher than the increase, bringing the overall bottled milk sales
     down in California. Class III demand has decreased also. Milk output is steady to trending
     lower, but supplies are available for spot needs. Some buyers are taking additional loads
     above their usual intake volumes. Nonetheless, there have been some outside sales to help
     with milk balancing. In Arizona, although fluid milk output is still declining, the
     butterfat in the milk is going up. Bottled milk and Class II sales are steady to trending up
     in order to fulfill local milk requests and ice cream demand. Manufacturers are helping
     balance out of state milk as they have processing spaces available. In New Mexico, balancing
     milk volumes have declined along with the decrease in milk production. Dryers for nonfat dry
     milk are running at slower paces. Class I milk intakes are declining, whereas Class II and
     III milk requests are climbing. Ice cream manufacturers are ramping up their production
     schedules as temperatures increase in the state and lead to more requests for ice cream.
     Pacific Northwest milk production continues to surpass expectations. So far, the region has
     been able to avoid any torrid heat wave. Industry contacts say moderate weather along the
     coast has provided great cow comfort, and seasonally mild temperatures inland have helped
     dairy farms produce record amounts of milk. Bottling demand is steady, and manufacturers say
     they are at or near full capacity. Milk production in the mountain states of Idaho, Utah and
     Colorado may be leveling off, but at peak output. Milk handlers suggest manufacturing
     facilities are at capacity. Some milk is flowing into auxiliary markets, but at discounts at
     $4.75 below Class IV. In addition, some contacts speculate that there may be some milk that
     is being discarded. While the dairy industry looks for ways to utilize its abundant milk
     supply, one small step that may help the industry do good and feed people is through a
     donation of a refrigerated truck to a regional foodbank. The truck can deliver and store
     1,800 gallons of fresh milk for Idaho¶s food insecure residents. Condensed skim is pricier
     in some parts of the West. Supplies are stable to a bit down. Cream demand isn't heating up
     as quickly as the weather at some western localities. Although sales remain active, some
     buyers are limiting their purchases that are above their normal booking volumes. Spot
     supplies are tight to balanced. More cream continues to channel to ice cream production to
     the detriment of butter. Cream multiples for all Classes are steady on the range.

     National Retail Report Dairy ± Fluid Milk Summary
     Advertised Prices at Major Retail Supermarket Outlets ending during the
     period of 7/12/19 to 7/18/2019

     Half Gallon, All Fat Tests               Weighted Average Price
     National                          This Period       Last Week      Last Year
     Conventional                        $2.17            $1.71           $2.60
     Organic                             $3.82            $4.33           $3.70

     Regional (Organic)                 Wtd. Ave.           Low            High
     Northwest                           $3.19            $2.50           $3.49
     Southwest                           $3.78            $2.99           $4.99

     Gallon, All Fat Tests                    Weighted Average Price
     National                          This Period       Last Week      Last Year
     Conventional                        $2.69            $1.95           $3.06
     Organic                             $6.35            $5.58            n.a.

     Regional (Conventional)            Wtd. Ave.          Low             High
     Northwest                           $2.44            $1.99           $2.99

     Western U.S., F.O.B. Cream
     Multiples Range - All Classes:               1.1500 - 1.3100

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