Fluid Milk and Cream Review - West
USDA - Thu Dec 07, 10:54AM CST

Madison, WI December 7, 2017 (REPORT 49)

In California milk output is flat to up. Industry contacts suggest 
that current spot prices are slightly lower due to milk supplies 
being more available. Sales into Class 1 production are steady this 
week as schools reopened last week after the Thanksgiving holiday and 
filled their pipelines. The November 4a price (butter/powder) in 
California is $13.62, down $0.89 from the previous month, and $0.07 
lower from a year ago. This compares to the Federal Order Class IV 
price of $13.99 for November. The November 4b price (cheese) is 
$15.52, down $0.65 from the previous month, and $1.93 lower from a 
year ago. This compares to the Federal Order Class III price for 
November at $16.88. Farm milk production in Arizona is increasing due 
to night time temperatures settling into a comfortable range for 
dairy cows. Overall, milk is abundant in the state of Arizona, and 
processors are actively balancing. Class I demand is moderate as some 
industry contacts believe that more milk loads were pulled in the 
first week of November compared to December. Class III intakes are 
reported steady to decreasing due to maintenance and repair workloads 
at some cheese plants. New Mexico milk production is trending down. 
Sales into Class I operations rebounded as retailers restock their 
shelves. Although some Class III processing plants had maintenance 
and repair issues that forced them to decrease their daily orders, 
total Class III sales picked up this week. Class II demand is up. 
Pacific Northwest milk production continues to follow seasonal 
patterns without any surprises. Manufacturers have plenty of milk 
available for processing. Industry contacts report milk is in good 
balance with processing needs and very little, if any, milk is 
leaving the immediate area. Bottling demand is steady. Milk 
production in the mountain states of Idaho, Colorado and Utah is 
steady. Manufacturers report lots of milk is available and they do 
not expect a change in that situation for months to come. Several 
processors note maintenance schedules for the next couple weeks will 
force milk handlers to shuffle milk loads between plants. Industry 
contacts do not anticipate any major issues finding homes for the 
loads being diverted. Condensed skim inventories are mixed in the 
West. In some areas, the prices are higher due to balanced supplies. 
However, in other areas they are selling condensed skim at discounted 
prices as milk supplies are ample, and more condensed skim is being 
produced. Western cream inventories are abundant. Interest for cream 
is mixed as some processing plants are focusing on clearing their 
cream supplies while others are starting to make more of the cream 
based holiday dairy products. Reports suggest that the ice cream 
market is also drawing more cream in California. Compared to a few 
weeks ago, trucking equipment is now easier to find for cream 
transportation. Cream multiples for all Classes this week are 1.05-
1.26. According to the DMN National Retail Report-Dairy for the week 
of December 1-7, the national weighted average advertised price for 
one gallon of milk is $2.34, down $0.95 from last week, and $0.12 
lower from a year ago. The weighted average regional price in the 
Southwest is $2.69, with a price range of $1.89-$2.99. The weighted 
average regional price in the Northwest is $1.77, with no price 
range. According to the NASS Dairy Products report, hard ice cream 
production in the West region for October 2017 is 11.6 million 
gallons, 11.6 percent lower than a month ago, and 12.4 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: