Fluid Milk and Cream — Western U.S.

June 20

In California, milk supplies are a tad tighter than usual. Nonetheless, finding the volumes
     required for processing needs is not an issue. In fact, a good balance between supplies and
     demand for milk is upheld through out of state sales. Milk production remains at the same
     level as the past week. Class I sales are steady in northern California, but somewhat
     lighter in the southern part of the state. Class III requests are down. In Arizona, weather
     conditions are conducive to less milk output. With the temperature reaching three-digit
     numbers and the current monsoon season, there is an anticipation that future heavy rains
     will likely impact cows' milk yield. Milk production has been lower compared to the previous
     year, but for the most part, it is enough to meet demand within the state. This week, there
     is a steady pull of milk to fulfill retailers' needs. In New Mexico, milk yield is close to
     stable. Operating activities are ongoing, but still not absorbing all the holdovers of milk
     due to disruptive repair and maintenance workloads. Bottled milk and Class III demands have
     declined somewhat, whereas Class II sales are picking up. Ice cream is driving the increased
     request for Class II. Pacific Northwest milk production is steady to higher. After a stretch
     of hot weather, parts of the region got some relief with lower temperatures. The cooler
     weather has allowed cows to recharge and milk production has rebounded somewhat. Milk
     intakes are in good balance with processing needs, and component levels have remained
     strong. Milk production in the mountain states of Idaho, Utah and Colorado is somewhat
     mixed. While output is steady in the southern parts of the region, milk yields continue to
     climb in the north. The heights of spring flush often do not occur until early July for
     Idaho. Favorable weather is supporting cow comfort. Milk production is in generally good
     balance with processing needs with only the occasional load being discounted. Cream
     multiples are on the rise, and as a result, some cream is moving eastward to fill processing
     needs there. Industry contacts say the hay harvest and spring planting got off to a later
     than usual start, but they anticipate no major forage issues for dairy farms. Condensed skim
     inventories are steady to lower depending on the area. Some processors had to get additional
     loads from surrounding states. Cream is moving to ice cream and cheese plants to satisfy
     high demands. Some western plant managers have stopped churning butter, while others have
     steady to declining churning schedules. Cream availability continues to tighten, but
     supplies can meet immediate needs. Cream multiples for all Classes are up 3 points at the
     top of the range this week.

     National Retail Report Dairy ± Fluid Milk Summary
     Advertised Prices at Major Retail Supermarket Outlets ending during the
     period of 6/14/19 to 6/20/2019

     Half Gallon, All Fat Tests               Weighted Average Price
     National                          This Period       Last Week      Last Year
      Organic                            $3.87             $4.09          $4.02
      Conventional                       $2.22             $1.26          $2.01

     Regional (Conventional)            Wtd. Ave.           Low            High
     Northwest                           $2.59             $2.59          $2.59

     Regional (Organic)                 Wtd. Ave.           Low            High
     Northwest                           $3.65             $2.50          $4.39
     Southwest                           $3.45             $2.99          $3.99

     Gallon, All Fat Tests                    Weighted Average Price
     National                          This Period       Last Week      Last Year
      Organic                            $6.77             $6.02          $6.70
      Conventional                       $2.86             $2.78          $2.82

     Regional (Conventional)            Wtd. Ave.           Low            High
     Northwest                           $2.75             $2.50          $2.99
     Southwest                           $2.67             $1.99          $2.99

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

     Multiples Range - All Classes:               1.1200 - 1.2800


     Information for the period June 17 - 21, 2019, issued weekly

     Secondary Sourced Information:

     Milk pooled on the Pacific Northwest Order 124 totaled 787.0 million pounds in May 2019.
     Class I utilization accounted for 18.9 percent of producer milk. The uniform price was up
     $0.51 from last month, and $1.44 above the same month a year ago.

     Milk pooled on the Arizona Order 131 totaled 434.1 million pounds in May 2019. Class I
     utilization accounted for about 23.9 percent of producer milk. The uniform price was up
     $0.51 from last month, and $1.66 above the same month a year ago.

     The NASS Milk Production report noted May 2019 milk production in the 24 selected states
     was 18.1 billion pounds, 0.1 percent down from a year ago. Milk cows in the 24 selected
     states totaled 8.79 million head, 55,000 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:

     May 2019 Milk Production, (USDA-NASS)

                   (Million Lb.)   % Change From
                                     1 Year Ago

     Arizona           427            - 4.3
     California       3577            + 1.3
     Colorado          406            + 3.6
     Idaho            1343            + 1.4
     New Mexico        721            - 0.8
     Oregon            222            + 1.4
     Utah              198            - 2.9
     Washington        587            + 0.5

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