Fluid Milk and Cream — Western U.S.

Feb. 6

Farm milk production with high protein/butterfat components levels continues ramping up in California, Arizona and New Mexico. Comfortable temperatures and enough availability of fair/good quality alfalfa hay have led dairy herds to produce higher milk yields. In this way, milk/cream intakes are more than adequate for most dairy manufacturing needs throughout the Southwest region.

In order to balance the current oversupply of raw milk, several spot loads of milk are moving from state to state, within the region, looking for processing room.

For example, bottlers are helping to clear copious amounts of milk, while butter makers continue churning actively, helping to reduce large supplies of cream within the region. Class I sales are reported as fair/good as some retailers are restocking shelves, while some schools are refilling their pipelines.

Pacific Northwest milk production is above projections. Mild winter weather is providing favorable cow comfort. The strong milk output is keeping many manufacturing facilities are at or near capacity. There are only small windows of available time for planned maintenance or repairs. Bottling demand remains steady.

Milk production in the mountain states of Idaho, Utah and Colorado is heavy and growing. Some manufacturers report they have plenty of milk with their current contracted shipments and very little room for additional spot milk loads.

The spot loads that they do accept are often priced as low as $6 under Class IV. Excess milk is getting pushed into surrounding regions.

Industry contacts say the winter snowpack is in good shape and reservoirs had good carryover going into the winter. They expect no issues with availability of water for early season cropping. Western condensed skim supplies are readily available for Class II and NDM manufacturing.

In the West, the spot trading activity for cream is generally steady from a week ago. This week, cream price factors for all Classes remained unchanged.

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