Fluid Milk and Cream - Western U.S. Report 1

Clearly, milk production in California has wrought concerns for marketers in the region and throughout the country. Recently, though, as processors have been running lighter holiday schedules, milk and cream have been more available in the Golden State. 

In the Southwest, cooler weather has improved recent milk output numbers. 

Pacific Northwestern farmers are continuing to see steady to strong farm milk production. 

In the mountain states of Idaho, Utah and Colorado, milk production is noted as hearty. Class I demand has regained some steam in the region, but contacts say previous weeks were slower due to the holiday downtime. Some contacts say Class I supply and demand were somewhat more stable this holiday season than in years' past. 

Cream in the region is widely available. Some contacts say they have never seen cream volumes at this level and at multiples this low (reported as low as .70 this week into butter production.) Contacts expect steady milk demand moving into 2025, while cream markets are less than stable moving forward. In the mountain states, cream availability is ample. Whereas in the coastal areas, it is somewhat steady when compared to previous weeks. 

Thursday Midday Dairy Market Summary - Limited Movement in Spot Prices

OUTSIDE MARKETS SUMMARY:

CORN:	Unchanged
SOYBEANS:	2 Higher
SOYBEAN MEAL:	$4.80 Higher
LIVE CATTLE:	$1.85 Higher
DOW JONES:	341 Points Lower
NASDAQ:	180 Points Lower
CRUDE OIL:	$1.47 Higher

MIDDAY MARKET UPDATE:

The block cheese price increased by 0.25 cent closing at $1.9125 with one load traded. The barrel cheese price remained unchanged with no loads traded. There was an unfilled bid and two uncovered offers for blocks and an uncovered offer for a load of barrels remaining at the close. The dry whey price remained unchanged at 75 cents with no loads traded and only a seller showing up Thursday. Class III futures are steady to 14 cents higher. The butter price slipped 0.50 cent closing at $2.5450 with 11 loads traded. Grade A nonfat dry milk declined by 0.50 cent closing at $1.37 with six loads traded. Class IV futures have not yet been traded. Butter futures are 3.15 cents lower to 1.00 cents higher. Dry whey futures are steady to 0.50 cent higher. The December Federal Order Prices will be announced Thursday afternoon.

Thursday Morning Dairy Market Update - Light Activity Expected Ahead of Spot Trading

OPENING CALLS:

Class III Milk Futures:	Mixed
Class IV Milk Futures:	2 to 5 Lower
Butter Futures:	Mixed

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	Steady to 1 Higher
Soybean Futures:	2 to 4 Lower
Soybean Meal Futures:	Mixed
Wheat Futures:	Mixed

MILK:

The new year will not change the market just because the calendar changed. It will change based on the market fundamentals that will unfold and many things will change. Underlying cheese prices were strong through the end of 2024 and may continue to find support. However, prices may be near a threshold, making it difficult to push through early in the year. Bottling demand is increasing as school accounts will be filled as students return to school. This is not expected to tighten the milk supply for manufacturing but will reduce the volume and price of spot milk. Spot milk last week showed stronger prices with discounts reaching $4.00 below class and a vast improvement from the previous week and year. The USDA will release the December Federal Order Class Prices Thursday.

CHEESE:

Cheese prices have had a nice increase recently. This may be nearing a price threshold as buyers may become less aggressive if they see reduced demand and sufficient cheese production. The increase in cheese prices has improved the outlook for milk prices early this year. These prices may hold as long as demand remains at the current pace.

BUTTER:

The butter price is expected to find support near the current level as buyers look ahead to this year and prepare for expected first-quarter demand. The large decline in inventory in November and good demand in December should have inventory near the levels of a year ago.