Contacts say California milk output is slightly lower than forecast, but production is steady. Milk is available for all dairy manufacturing needs. Bottling orders are higher. Class II demand is level. Class III sales are steady to increasing. Some contacts anticipate dairy farmers may face higher feed costs as lack of irrigation due to water cuts could prevent a final cutting of alfalfa in some areas, potentially adding additional transportation costs if local supplies are insufficient.
Arizona milk output is decreasing. School is back in session, driving higher Class I demand. Class II and Class III sales are steady.
Milk production in New Mexico is dropping. A surge in driver turnover has exacerbated existing hauling challenges, leading to some delayed pickups and deliveries. Holdover numbers are manageable. Balancing plants have available capacity for more milk. However, with lower farm output and higher bottling orders, handlers do not anticipate needing to funnel additional volumes to balancing plants any time soon. Class II demand is flat to lower.
Overall, Pacific Northwest farm-level milk supplies are meeting handler expectations for this point in the year. However, output is lower in some parts of Washington where this summer’s hot, arid conditions hit cows hard. Class I sales are increasing. Demand for Class II and Class III milk is flat.
In the mountain states of Idaho, Utah, and Colorado, milk production is steady. Bottling demand is growing as education institutions refill pipelines. Class II and III orders are level.
Contracted condensed skim is steady. Cream availability is tightening. Some contacts report flatter local demand, as ice cream production declines from its seasonal peak. Butter production is mixed. The bottom of the cream multiples range inched up this week.
Western U.S., F.O.B. Cream
Multiples Range - All Classes: 1.1800 - 1.3400
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