Fluid Milk and Cream — West
In some areas of the West, milk surpluses have been noted above projected volumes. According to market participants, this could be because Class I and II sales were less than expected.
Currently, California milk production is increasing more than in previous years.
Nonetheless, coverages were largely available to process all the milk within the state.
Class I sales in the state are returning to normal as schools prepare to reopen. No issues with milk handling surfaced during the holiday.
In Arizona, balancing plants are full of milk due to the closing of small facilities earlier in the week for the holiday. Fortunately, there are adequate capacities for milk handling. Milk orders from retail outlets are increasing while intakes from educational institutions are slowly returning to pre-holiday levels. Class II intakes remain active as cream prices are low.
New Mexico milk production is stable, following the same pattern as last week. Many plants are back to normal schedules after the holiday, and they are running at full capacities to process all the excesses of milk. Class I and II sales increased while Class III demand is declining.
Milk production in the Pacific Northwest is strong. Dairy contacts suggest milk components have maintained high levels and, as a result, cream is plentiful as well. In some cases, this is putting downward pressure on cream multiples. Milk intakes are slowly returning to normal following the winter holidays. Bottling demand is slowly returning to pre-holiday levels. Manufacturers are not having any trouble getting the milk needed for processing.
Milk production in the mountain states of Idaho, Utah and Colorado continues at strong seasonal volumes. Manufacturers have plenty of milk available for almost all processing needs. Any excess loads of milk are getting pushed into surrounding states. The western condensed skim market is stable, with products largely accessible to the market. More condensed skim moved to the dryers during the past holidays.
In the West, cream is plentiful and is trading at low multiples. Cream multiples for all Classes are 1.00-1.17. Butter processors are making more butter and replenishing their stocks for future usages.
National Retail Report Dairy ± Fluid Milk Summary Advertised Prices at Major Retail Supermarket Outlets ending during the period of 12/28/18 to 1/3/2019 Half Gallon, All Fat Tests Weighted Average Price National This Period Last Week Last Year Organic $3.88 $4.57 $3.20 Conventional $1.18 $2.60 $2.27 Regional (Conventional) 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 $3.89 $3.89 $3.89 Gallon, All Fat Tests Weighted Average Price National This Period Last Week Last Year Organic $4.99 $5.21 $5.99 Conventional $2.43 $2.61 $3.22 Regional (Conventional) Wtd. Ave. Low High Northwest n.a. n.a. n.a. Southwest $2.09 $2.09 $2.09 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: 1.0000 - 1.1700