Fluid Milk and Cream — West
California milk processors are getting prepared for additional milk balancing during the holidays. Some smaller plants will reduce their intakes or close, so more milk will be going to butter and powder plants. Regional plants are in good shape and have the capacities necessary to handle the expected extra loads of milk.
This week, milk production is even to up. Educational institutions are also closed for the holidays. As the result, Class I sales are currently down.
Recent rains in California have not much impacted milk transportation and deliveries. In general, milk yield is even to increasing. Some reports suggest that there has been a lot of shifting in supplies.
In Arizona, processing plants are running at full capacities and taking good volumes of milk. Milk supplies are increasing and seem to be higher than demand. Therefore, more milk is moving to balancing plants. Plant managers state that despite the increase in milk production, it still hasn’t reached that of last year.
Fluid milk intakes are dropping with educational institutions in recess and grocery stores planning for the holidays.
In New Mexico, Class II usage wound down ahead of the holidays whereas cheese production schedules have increased to handle the additional manufacturing milk volumes.
Repair/maintenance workloads at a Class III facility caused it to miss on receiving planned deliveries of milk. Fortunately, manufacturing capacities were adequate at other locations to take on the additional milk volumes. As the result of schools’ closure for the holiday break, Class I is also experiencing a reduced demand. Overall, milk production is trending higher.
Milk production in the Pacific Northwest is following typical seasonal patterns. Bottling demand is easing back as educational institutions begin winter breaks. There is plenty of milk for processing and the additional milk made available from school bottling is forcing milk handlers to implement their planned adjustments for the season.
Precipitation has moved into the region and is beginning to recharge water reservoirs.
In the mountain states of Idaho, Utah and Colorado, milk production is strong. Industry contacts say components are steady and have not come down much from seasonal highs.
There is plenty of milk for processing. Distressed loads of milk are more prevalent in the northern parts of the region. As a result, some milk loads are getting pushed into neighboring states. Some farmers have lost access to markets. A few farms have liquidated rather than face further financial stress, while others are hoping proposed additional processing can improve market conditions in the region.
Milk intakes are in better balance in the southern parts of the region. In the West, there have been some push backs of condensed skim, resulting in more supplies.
According to market participants, condensed skim is being more contracted for next year compared to this year. Cream supplies are becoming more available in the West, whereas orders are dropping. Consequently, more cream has started to move to the churns. Cream multiples for all Classes are 1.05-1.26.