Fluid Milk and Cream - Western U.S. Report 6

Strong milk production is continuing in California. Milk shipments and handling are back to     normal following the winter storm from a couple weeks ago. Contacts suggest the storm was     able to ease some of the immediate concerns of drought within the state. Industry contacts     say many dairy processors are running at or near capacity and are unable to take on much     more milk. In some cases, milk is diverted to calf ranches when there is a disturbance at     the processing facility. Class I sales are steady. Class II demand is solid.

Milk production in Arizona is rising along typical seasonal patterns. Class I and II demands     are steady and pulling good volumes. Milk intakes are in good balance with processing needs.     Manufacturers say they are not seeking out additional loads of milk.

In New Mexico, milk production is steady to higher, following seasonal patterns.     Manufacturers have plenty of milk for processing.

Pacific Northwest milk production is strong, and components are above levels from last year.     Industry contacts say disruptions at individual plants may create the temporary need to move     milk around the region, but milk handlers are able to find homes for the milk without much     trouble. A healthy retail demand is supporting bottling sales.

Mountain state (Idaho, Utah and Colorado) milk production is strong. The abundance of milk     in Idaho has kept milk handlers busy searching out homes for the milk. In some cases,     processors are squeezing the extra milk into their facilities at $4 to $5 under Class IV     prices. In Colorado and Utah, milk production is in better balance with processing needs.

There is plenty of condensed skim milk available for drying. In pockets of the region,     industry contacts say a few manufacturers are considering dumping buttermilk to preserve     dryer time for drying condensed skim.

Western cream is plentiful, but supply and demand ebbs and flows daily. There may be a     deluge of cream one day but more balanced the next, hence the wide range of cream multiples.     Ice cream production is picking up and taking up some of the slack. Butter makers are taking     in large volumes. At the end of the week, cream is often more available as processor needs     are filled for the week. A few cream handlers are trying to work out arrangements to ship     some of the extra cream eastward from the west coast.