Fluid Milk and Cream Review - West

Madison, WI October 12, 2017 (REPORT 41)

This week, according to industry contacts, the weather in California 
is appropriate for good cow milking. As the result, farm milk 
production is seasonally higher. Fluid milk sales into Class 1 are 
steady compared to last week. Some processors are not running at full 
capacity and they believe that they are at the lowest supply levels 
for the remainder of this year. Although farm milk seems to be 
currently more available in California, prices in the spot market 
remain slightly higher. In Arizona, cooler weather conditions are 
contributing to higher milk yield. There is sufficient milk to meet 
all processing needs. Milk going into schools' pipelines is steady. 
Contacts report that the current prices for feed inputs are lower. In 
Arizona, topsoil and subsoil moistures are respectively 82 and 81 
percent adequate to surplus. Alfalfa hay is 83 percent good to 
excellent. Overall farm milk sales in New Mexico are increasing this 
week. Class III demand has been moving up for the past three weeks. 
Class I interest also is up, but Class II demand remains stable 
compared to last week. Farm milk production is steady to lower, but 
remains in line with seasonal output levels for this time of the 
year. Overall, the market is balanced. The fifth and sixth cutting of 
alfalfa hay are respectively 79 and 41 percent completed. Topsoil and 
subsoil moistures are individually 78 and 81 percent adequate to 
surplus. Pacific Northwest milk production for the year is off a 
little due to the hot, dry summer the region experienced. Now that 
cooler temperatures and a little rain have come to the region, dairy 
contacts expect milk output to recover somewhat. That said, current 
milk production is seasonally in balance. Manufacturers report plenty 
of milk for most processing needs. In the mountain states of Idaho, 
Colorado and Utah, milk supplies remain heavy. Cow numbers are higher 
than they were a year ago and favorable weather has maintained a 
strong milk flow. Many manufacturers are running full production 
schedules. Any disruption within one plant creates a ripple, pushing 
milk out into neighboring states. The western condensed skim market 
is steady. Production and supplies are stable and in line with 
current demand. Cream intakes are starting to pick up in many western 
states. Cream cheese makers have seasonally increased their orders 
for the coming holidays. Contacts suggest that some ice cream 
processors are also taking in more cream. Cream multiples for all 
usages this week, are steady at 1.06-1.28. According to the DMN 
National Retail Report-Dairy for the week of October 6-12, the 
national weighted average advertised price for one gallon of milk is 
$2.97, up $0.31 from last week, and $0.59 higher from a year ago. The 
weighted average regional price in the Southwest is $2.45, with a 
price range of $1.89-$2.59. The weighted average regional price in 
the Northwest is $1.99, with no reported price range. According to 
the NASS Dairy Products report, hard ice cream production in the West 
region for August 2017 is 16.7 million gallons, 3.0 percent higher 
than a month ago, but 1.2 percent below the previous year. 

1100CT Florence.KoneGonzalez@ams.usda.gov (608)422-8594 
Michael.Bandli@ams.usda.gov (608)422-8592
USDA/AMS/Dairy Market News, Madison, Wisconsin Dairy Market News 
website: http://www.ams.usda.gov/market-news/dairy
Dairy Market News database portal: