MD_DA240

     Fluid Milk and Cream - Western U.S.

     Report 9 - Released on February 28, 2019

     California weather conditions remain wet and cold, keeping cows' milk output flat. A
     mechanical breakdown at one processing facility resulted in more milk supplies in the market
     because the plant had to close and look for alternative ways to channel its milk. Although
     several loads of milk were successfully redirected to other processing locations, according
     to some reports, some milk was discarded. Class IV fulfillment was also affected as intakes
     declined. Aside from this incident, other balancing agreements are getting milk placed as
     scheduled. Class I sales are unchanged from last week. After a drop last week, farm milk
     production in Arizona is back up this week. The fluctuation in milk volumes is partly caused
     by variations in temperatures as well as heavy rains that occurred recently. Class I milk
     demand is steady. New Mexico milk production continues to increase. The volume of milk
     moving into cheese vats is significantly lower compared to last week because some
     manufacturers are trying to keep their inventories at low levels while others are dealing
     with repair and maintenance workloads. Class I demand is also down, but Class II orders are
     up. Although milk holdovers are higher this week, they remain manageable. Many processing
     facilities are running at or near full capacities. Milk production in the Pacific Northwest
     is steady to higher. While the region is still getting occasional snowfall, disruptions to
     milk hauling are easing. Bottlers are getting caught up, and bottling demand is returning to
     normal seasonal patterns. As schools enter spring breaks, single unit packaging is expected
     to step back a bit. Cream and milk are readily available for most processing needs. A
     positive result of the winter storms has been the reduction of dryness and drought
     conditions across the region. Milk production in the mountain states of Idaho, Utah and
     Colorado is level. Due to fluctuations to fluid milk needs and maintenance schedules, milk
     handlers moved a few loads into neighboring states for processing. Milk processors had
     plenty of milk for manufacturing. Earlier in the week, a processor announced plans to begin
     construction of a large aseptic milk processing plant in Idaho. The facility will begin
     operations in the summer of 2020. Some butter producers do not have enough capacities for
     extra loads of cream due to their facilities being already full of cream. Therefore, they
     are limiting spot purchases. Cream availability is high in the West and seems even more
     prevalent in California. While butter output is active, ice cream production has yet to pick
     up. Multiples for all Classes increased a bit, ranging 1.00-1.17.

     Western U.S., F.O.B. Cream
     Multiples Range - All Classes:               1.0000 - 1.1700


     Information for the period February 25 -  March 1, 2019, issued weekly

     Secondary Sourced Information:

     National Retail Report Dairy ± Fluid Milk Summary
     Advertised Prices at Major Retail Supermarket Outlets ending during the
      period of 2/22/19 to 2/28/2019

     Half Gallon, All Fat Tests                Weighted Average Price
     National                        This Period      Last Week     Last Year
      Organic                           $4.07           $3.97         $4.15
      Conventional                      $1.89           $2.26         $2.44

     Regional (Conventional)           Wtd. Ave.         Low           High
      Northwest                          n.a.            n.a.          n.a.
      Southwest                          n.a.            n.a.          n.a.

     Regional (Organic)                Wtd. Ave.         Low           High
      Alaska                             n.a.            n.a.          n.a.
      Hawaii                             n.a.            n.a.          n.a.
      Northwest                         $4.04           $3.99         $4.29
      Southwest                         $4.29           $4.29         $4.29

     Gallon, All Fat Tests                     Weighted Average Price
     National                         This Period     Last Week     Last Year
      Organic                           $5.31           $4.70         $6.57
      Conventional                      $2.24           $3.40         $2.77

     Regional (Conventional)           Wtd. Ave.         Low           High
      Northwest                         $1.99           $1.99         $1.99
      Southwest                         $2.59           $2.59         $2.59

     Regional (Organic)                Wtd. Ave.         Low           High
      Northwest                         $5.00           $5.00         $5.00
      Southwest                          n.a.            n.a.          n.a.
     Published by:
     Dairy Market News - Madison, WI
     FLORENCE KONE-GONZALEZ, (608)422-8594
     Email: Florence.KoneGonzalez@ams.usda.gov

     Additional Dairy Market News Information:
     Dairy Market News (DMN) by Phone: (608)422-8602
     DMN Website: https://www.ams.usda.gov/market-news/dairy
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