Fluid Milk and Cream — Western U.S.
California fluid milk output for January is picking up when compared to last month’s data. According to dairy farmers, daily average production is on the rise. Component levels have been improving as well. Class I demand is unchanged from the past week.
In Arizona, milk production is ongoing. Handlers do not have any issue with milk distribution. Class II intakes are down, and Class I sales are also slightly lower as schools were out at the beginning of the week for the holiday. Some processors had to temporarily stop taking out-of-state milk to focus on helping other in-state processors with milk balancing.
New Mexico milk production is responding positively to favorable weather outcomes. However, the drawback is that milk holdovers are higher than usual, keeping balancing plants busy with excess milk clearing. Repair and maintenance projects are contributing to the increase in holdovers. Class I orders have grown this week. This has helped diminish the loads of milk that need a home. Class II and III sales are stable to a tad up.
Pacific Northwest milk and cream supplies are heavy. Milk production is above projections for this time of year and components are high. Manufacturers have plenty of milk for processing needs. In some cases, processors are trying to squeeze in routine maintenance, but need to pass on loads of milk or cream to do so. Bottling demand is steady.
In the mountain states of Idaho, Utah and Colorado, milk production is strong and does not show any signs of subsiding. Manufacturers are running full production schedules. Extra loads of milk are finding their way into surrounding regions. Industry contacts say they have seen trucks from across the country picking up loads of milk, cream, or condensed skim. Discounted loads of $4.75 under Class IV are common. Condensed skim spot sales are steady to down. Most loads are clearing through the dryers. Cream multiples for all Classes have remained stable at lower levels for the last three consecutive weeks.
According to some market players, Class II intakes are up in some areas because several ice cream makers, who haven’t contracted enough cream for Q1, are looking for spot loads. Churning is active as several manufacturers don’t have any price incentive to sell cream. As so, in-house butter making is the most cost-effective alternative for handling excess cream.