Recent reports show California’s surface water is decreasing, and in some areas, bids on remaining limited water resources are driving the prices higher and higher. Some dairy operations are selling off cows, reducing herd size to help manage water needs and in anticipation of drought-induced feed shortages and subsequent higher prices. However, the drought impact varies from farm to farm. Milk production is steady and following seasonal trends. Bottling orders are flat to lower.
Arizona milk production is dropping in the summer heat. Handlers have been pulling at available supplies to fill steady Class I and II orders.
Milk output in New Mexico is decreasing. Bottling orders are flat, and Class II demand is steady to slightly higher.
Record-shattering heat seared the Pacific Northwest early in the week. While triple-digit temperatures have moved out of the forecast, warmer than usual weather will likely last a few more weeks. Milk is widely available right now, but some industry contacts expect the heat will shrink yield by a few percentage points. Class I orders are down. Class II and III orders are level.
Demand for Class I and III milk is steady in the mountain states of Idaho, Utah, and olorado. Milk production in Idaho is particularly strong. Local contacts have sourced spot loads at up to $6.00 under Class III. Other outlets are willing to pay more, but the shortage of tanker drivers is keeping milk closer to its origin and available at a discount. Output is tapering further south in the mountain states.
Contracted condensed skim is steady. Cream is in adequate supply. Some cream-based manufacturers are modifying production schedules due to the heat, but other butter churns and ice cream plants remain active. Western cream multiples are unchanged from last week.
Western U.S., F.O.B. Cream
Multiples Range - All Classes: 1.0500 - 1.2500
Information for the period June 28 - July 2, 2021, issued weekly
Secondary Sourced Information:
PACIFIC NORTHWEST MARKET ORDER
Milk delivered to the Pacific Northwest Order 124 totaled 632.0 million pounds in May 2021. Class I utilization was 133.3 million pounds and accounted for 21.09 percent of producer milk. The uniform price was $17.26, up $0.98 from April 2021, and $5.29 above the same month a year ago.
ARIZONA MARKET ORDER
Milk delivered to the Arizona Order 131 totaled 356.8 million pounds in May 2021. Class I utilization was 107.9 million pounds and accounted for about 30.2 percent of producer milk. The uniform price was $17.25, up $0.82 from April 2021, and $4.87 above the same month a year ago.
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