In California, improvements to cow comfort are minimal, as temperature drops were small. Milk production is lower and milk volumes are tighter. Handlers suggest preliminary 2023 August production volumes are below August 2022 production volumes. Some open processing capacity is available. However, partly due to some planned maintenance power outages recently the Central Valley is comparatively tighter with open processing capacity. Handlers relayed some balancing plants are not currently operating. Class I and III milk demand is strong. Class II and IV milk demand is steady. According to the California Department of Water Resources, as of August 10, 2023, the state had received 8.52 inches of water above the historical average. Handlers relay that farmers are still in good shape with available water for irrigation.
Arizona temperatures stayed in the triple digits arena this week, heating up to nearly the 120s on the hottest day. Milk output on the farm is lower as the heat is impacting cow comfort. Milk volumes are tight, and some open processing capacity is available. Spot load sales and purchases are reported at above Class prices. Class III has picked up stronger demand along with Class I. Demand for other Classes is unchanged.
Although temperatures in New Mexico started in the 80s this week, they climbed back to finish the later part of the week in the 90s. Handlers indicate milk production is trending lower, but supplies are in decent shape compared to processing needs. Class I demand is stronger with educational facilities in session. Class III demand is strong. Demand for the remaining Classes is steady.
Handlers in the Pacific Northwest report farm level milk output has been trending down in recent weeks, partly due to heat impacts on cow comfort. Manufacturers indicate milk volumes are meeting most processing needs. However, fat components from milk volumes are tighter. Milk Class demands are unchanged.
Milk production in the mountain states of Idaho, Utah, and Colorado is lower. Handlers indicate seasonal week to week decreases have become flatter. However, some handlers also indicate fat components of milk volumes have dropped to lower seasonal levels. Although some open capacity is reported, processors indicate milk volumes are in good balance with manufacturing needs. Class I and III milk demand is strong, while demand for remaining Classes is steady.
Lower milk production at the farm level and contracted buyers ordering at the higher amounts is making condensed skim milk available for spot purchasing tight. Demand is steady. Although heavier Class I processing has increased available cream volumes, cream is still on the tight end overall for spot purchasers looking for loads. Cream demand is steady. Higher end cream multiples moved slightly lower this week.
Western U.S., F.O.B. Cream
Price Range - All Classes; $/LB Butterfat: 3.2154 - 3.7288
Multiples Range - All Classes: 1.1900 - 1.3800
Price Range - Class II; $/LB Butterfat: 3.4315 - 3.7288
Multiples Range - Class II: 1.2700 - 1.3800
