The heatwaves surging through the West have introduced record high temperatures to multiple states. The heat coincides with, and exacerbates, record drought throughout the region. Despite these hot, arid conditions, contacts are not reporting precipitous drops in milk.
June milk production is trending up year-over-year in California. Output is steady this week and following seasonal patterns. Class I demand is steady to lower. There are some reports of diversions this week in response to both plant equipment issues and scheduled downtime.
Arizona milk yield is declining. Handlers report that volumes of additional milk from out of state are beginning to decrease as well. Bottling orders are steady.
Milk output is decreasing a little in New Mexico. Bottling orders are level. Class II demand is up slightly. Some contacts say rising fuel costs and tight driver availability are changing the hauling market; a few related delivery issues have been reported, but so far, the issues are said to be minor. Balancing plants are active but less stressed than in recent weeks. Holdovers have been reduced to more manageable numbers.
Milk is plentiful in the Pacific Northwest. Overbase programs are in place to help manage milk supplies, but the abundance is amplified by staffing shortages, high freight costs, limited tanker availability, missed delivery appointments, port delays, and shrinking warehouse space. Some contacts are hopeful that high temps will help staunch the flow of milk soon. Class I demand is lower, and Class II and Class III orders are steady.
Milk production varies throughout the mountain states of Idaho, Utah, and Colorado. Output is strong in Idaho, where contacts report discounted spot loads can be found at up to $5.50 under Class IV. Further south, milk production is beginning to decrease in the desert heat. Class I and III orders are strong.
Condensed skim contracts are steady. Cream availability meets current dairy manufacturing needs. Butter and ice cream production are mixed, varying from flat to active, throughout the region. The top of the cream multiples range moved down a little this week.
Western U.S., F.O.B. Cream
Multiples Range - All Classes: 1.0500 - 1.2500
Information for the period June 21 - 25, 2021, issued weekly
Secondary Sourced Information:
CALIFORNIA MARKET ORDER
Milk pooled on the California Order 51 totaled 2.03 billion pounds in May 2021. Class I utilization was 388.2 million pounds and accounted for about 19.1 percent of producer milk. The uniform price was $16.73, up $0.82 from April 2021, and $4.78 above the same month a year ago.
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