Fluid Milk and Cream — Western U.S.

July 26

Fluid milk production is stable in California after recuperating from the previous decline.
     The current hot weather is keeping milk output from increasing. In addition, component
     levels have recently dropped. Milk is flowing to processing plants as scheduled. Bottled
     milk requests are the same as last week. In Arizona, processors have enough milk loads for
     their daily activities despite recent drops in milk output. Class I sales are unchanged
     compared to the previous week. Class II demand is stronger due to the ongoing demand to
     satisfy ice cream production needs. Butter makers have slowed down their operations as they
     manage to sell some of their cream. In New Mexico, a combination of lower output and higher
     demand has put downward pressure on milk supplies. As the result, milk clearing into
     balancing is lighter than usual. While Class I and III sales are up, Class II demand has
     declined. There was no surplus of milk reported in the state because manufacturers have just
     what they need to fulfill processing requirements. Favorable weather in the Pacific
     Northwest continues to support strong milk production. In eastern Washington, higher daytime
     temperatures are cutting into very strong milk output volumes, but only minimally, as cooler
     nighttime temperatures allow cows to recharge. Manufacturers have plenty of milk available
     for processing. Bottling demand is steady. Milk output in the mountain states of Idaho, Utah
     and Colorado is strong and may be at peak production levels. Late last week, several plants
     had scheduled or unscheduled shutdowns causing a ripple across milk transportation channels.
     Milk handlers suggest manufacturing facilities are at capacity and with the hiccups, they
     needed to juggle load deliveries. Condensed skim availability is trending lower, following
     the same path as milk production. Condensed skim prices are also variable by state. The
     Western cream market has kept the same strength as in the week before. Demand is ongoing and
     unchanged. Inventories are available for contractual buying, but a bit limited to satisfy
     spot requests. Buyers are hesitant about buying cream when cream multiples reach the 1.30s
     mark. Higher freight costs are also limiting cross regional trades.

     National Retail Report Dairy ± Fluid Milk Summary
     Advertised Prices at Major Retail Supermarket Outlets ending during the
     period of 7/19/19 to 7/25/2019

     Half Gallon, All Fat Tests         Weighted Average Price
     National                    This Period   Last Week   Last Year
     Conventional                   $1.95        $2.17       $1.97
     Organic                        $3.49        $3.82       $3.83

     Regional (Conventional)      Wtd. Ave.       Low         High
     Northwest                      $1.99        $1.99       $1.99
     Southwest                      $2.99        $1.99       $3.99

     Regional (Organic)           Wtd. Ave.       Low         High
     Southwest                      $4.31        $3.99       $4.99

     Gallon, All Fat Tests              Weighted Average Price
     National                    This Period   Last Week   Last Year
     Conventional                   $2.80        $2.69       $2.67
     Organic                        $5.45        $6.35       $6.99

     Regional (Conventional)      Wtd. Ave.       Low         High
     Northwest                      $3.50        $1.99       $5.00
     Southwest                      $2.57        $1.99       $2.75

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

     Information for the period July 22 - 26, 2019, issued weekly

     Secondary Sourced Information:

     The NASS Milk Production report noted June 2019 milk production in the 24 selected states
     was 17.3 billion pounds, 0.1 percent up a year ago. Milk cows in the 24 selected states
     totaled 8.78 million head, 62,000 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:

     June 2019 Milk Production, (USDA-NASS)

                   (Million Lb.)   % Change From
                                     1 Year Ago

     Arizona           394            - 4.6
     California       3344            + 1.2
     Colorado          405            + 6.0
     Idaho            1303            + 2.0
     New Mexico        687            - 2.8
     Oregon            215            + 1.4
     Utah              193            - 3.0
     Washington        569            + 0.2

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