Some delivery delays and bottlenecks were reported this week as contacts say that the widespread transportation issues plaguing the country, including steep freight and tanker shortages, are worst in the West. Little to no precipitation fell in much of the region this week, and the West continued to face higher than normal temperatures. Despite these conditions, and despite normal seasonal patterns of declining yield, Western milk is abundant. Many of California’s water reservoirs are at less than half capacity and nearing record low levels. Melting mountain snowpack, which would typically help replenish reservoirs throughout spring and summer, is largely depleted. Some water restrictions are already in effect: farmers in central California have been warned of potential water cutoffs, and more widespread cuts are expected to come. However, milk output is steady and strong. Contacts report that, so far, June production is trending up year-over-year and down slightly from last month. Class I orders are flat to lower.
Parts of Arizona are experiencing triple-digit temperatures in this week’s heatwave. Milk output is beginning to drop as the weather warms. While some handlers continue to bring in out of state milk, those supplemental volumes are decreasing as well. Class I demand is steady.
Milk production is flat in New Mexico. However, milk is widely available as Class I orders are lower, and Class II demand is level. Some contacts say that balancing is a little stressed as busy manufacturing plants are working to achieve equilibrium between high holdover numbers and lower sales.
Milk output in the Pacific Northwest is strong but starting to dip down in some areas, following typical seasonal patterns. Overbase programs are in place to help keep milk supply in check. Bottling orders are lower, but Class II and III demand is steady.
Throughout the mountain states of Idaho, Utah, and Colorado, milk production is heavy in the north but is beginning to taper in the heat further south. Some contacts say spot loads are available in Idaho at discounts of up to $5.50 under Class IV. Class I and III orders are strong.
Condensed skim contracts are steady. Limited spot loads are available around flat class pricing.
Cream demand is increasing, but supplies are available to meet current dairy manufacturing needs. Ice cream and butter production are mixed throughout the region, ranging from flat to very active, and cream cheese production is picking up steam. Cream multiples shifted up this week.
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