Fluid Milk and Cream — West

December 6

California milk production is steadily increasing. Temperatures remain favorable for cows’ wellbeing, giving a small boost to milk output levels. Fluid milk demand is at a normal level for this time of the year. Processors are able to keep up with derivative dairy products production schedules. There is also a good balance between the supplies and requests for milk. In Arizona, milk output is slowing rising, but remains lower than that of last year. Class II demand is strong and is being used to fulfill the upcoming holiday needs. Bottling milk orders are steady. Some loads of milk are moving out of state.

Balancing plants are running as usual. Overall, milk supplies and needs are balanced. In New

Mexico, adequate milk supplies are available for filling current needs. Overall, farm milk production is down this week. Class I and II sales are steady to a little down while Class

III demand is growing. No surplus milk was reported as all the milk is being used within and out of the state. Pacific Northwest milk production remains strong. In some pockets, milk handlers note a slight upturn in production due to favorable weather conditions and availability of good feedstocks. Manufacturers say they are not having any trouble keeping production schedules filled with milk. Bottling demand is steady. In the mountain states of

Idaho, Utah and Colorado, milk production is strong. Many manufacturers are running full production schedules and are not having any difficulties getting the milk needed for processing. Winter snow packs are starting to accumulate at elevations. The snows that will supply next year’s irrigation needs are generally above average in the southern part of the region and slightly below in the northern part, however there is a long winter ahead.

Condensed skim remains handy in the West as weather conditions are advantageous for more milk production. Condensed skim drying is ongoing. Currently, nonfat dry milk demand seems solid. Therefore, industry participants are waiting to see if the condensed skim market conditions will change. Western cream inventories are balanced. More cream continues to be used for holiday dairy foods manufacturing. Steady loads of cream are moving to the churns.

Multipliers for all usages are ranging 1.10-1.28.

National Retail Report Dairy ± Fluid Milk Summary

Advertised Prices at Major Retail Supermarket Outlets ending during the period of 11/30/18 to 12/06/2018

Half Gallon, All Fat Tests Weighted Average Price

National This Period Last Week Last Year

Organic $4.38 $2.99 $3.71

Conventional $2.18 n.a. $2.33

Regional (Conventional) Wtd. Ave. Low High

Northwest $0.99 $0.99 $0.99

Southwest n.a. n.a. n.a.

Regional (Organic) Wtd. Ave. Low High

Northwest $3.99 $3.99 $3.99

Southwest $4.26 $2.38 $5.69

Gallon, All Fat Tests Weighted Average Price

National This Period Last Week Last Year

Organic $5.64 $7.57 $6.22

Conventional $2.34 $2.09 $2.34

Regional (Conventional) Wtd. Ave. Low High

Northwest $1.99 $1.99 $1.99

Southwest $2.38 $2.38 $2.38

Regional (Organic) Wtd. Ave. Low High

Northwest $5.00 $5.00 $5.00

Southwest n.a. n.a. n.a.

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

Multiples Range — All Classes: 1.1000 — 1.2800

Information for the period December 3 — 7, 2018, issued weekly

Secondary Sourced Information:

According to California Department of Food and Agriculture, October 2018 Class 1 sales in

California totaled 52.3 million gallons, up 9.1 percent from last month, but down 2.8 percent from the previous year. From January through October 2018, Class 1 sales totaled

498.8 million gallons, down 3.4 percent from the comparable period in 2017.

Milk pooled on the Pacific Northwest Order 124 totaled 810.2 million pounds in October

2018. Class I utilization accounted for 21.9 percent of producer milk. The uniform price was

$15.77, up $0.33 from last month, but $0.26 below one year ago.

Milk pooled on the Arizona Order 131 totaled 419.2 million pounds in October 2018. Class I utilization accounted for about 25.8 percent of producer milk. The uniform price was

$16.22, up $0.37 from last month, but down $0.21 below one year ago.

Dairy Products Report — Ice Cream, Regular, Hard

Released December 4, 2018, 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: October 2017 and 2018

Monthly Production (1000 pounds) Percent Change from

Total Cream, Regular (Hard October September October October September

Region 2017 2018 2018 2017 2018

United States 56,616 59,019 60,526 6.9 2.6

West 11,526 10,906 10,972 -4.8 0.6

California 6,603 5,407 5,367 -18.7 -0.7

Oregon 970 1,090 1,091 12.5 0.1

Utah 2,093 2,242 2,316 10.7 3.3

Ice Cream, Regular (Hard) ± Cumulative Production January — October

Cumulative Production Percent Change

(1000 pounds) from

Report Month 2017 2018 2017

October 666,524 638,006 -4.3

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