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WEEKLY MILK PRODUCTION UPDATE – Dairy Market News
4/28/11
Increased manufacturing milk supplies were the norm throughout the Eastern region over the holiday weekend and into the early part of the week. Class I demand has returned to mostly normal levels for this time of year with some kickbacks and sluggishness remaining in the South as some bottlers may have over ordered and some schools had extended holiday breaks.
Cool wet weather in the Northeast region continues to delay spring field work activities and limit milk production increases. Pastures are improving slowly with ratings spread evenly between poor, fair and good.
Warmer temperatures in the Mid-Atlantic and greener pastures are advancing milk production increases with production rapidly approaching the seasonal peak.
Milk intakes in the Deep South are decreasing as day time temperatures have moved consistently into the 90's. Other areas in the Southeast region are at or near peak production levels.
Auxiliary cheese plants were utilized over the holiday weekend and into the early part of the week to handle the increase in milk volumes.
Florida is experiencing unusually warm weather for this time of year and as one contact put it, "we're getting June heat in late April".
Cow comfort levels are declining and with it, reduced milk production. Florida also continues to be very dry. Pasture quality, which was improving, is now declining and producers have to continue supplemental feeding.
Cream supplies were readily available over the holiday period and into the early part of the week. Demand increased this week as ice cream production and other Class II manufacturers returned to normal production schedules. Cream multiples ranged from 123-132.
Condensed skim supplies increased significantly this week, following increases in the manufacturing milk supply and also due to a manufacturing plant shutting down their dryers for maintenance. Expanded yogurt production in the Northeast has increased condensed skim demand.
March 2011 POOL RECEIPTS of milk in CALIFORNIA total 3.44 billion pounds, 7.9% higher than last year, according to CDFA. The March blend price, at a fat test of 3.73%, is $18.35, $0.45 higher than February and $5.23 more than March 2010. The percentage of receipts used in Class 1 products is 14.9%. The March quota price is $19.01 and the over quota price is $17.31. These prices are $0.57 higher than February and $4.90 more than a year ago.
Milk production patterns in CALIFORNIA are continuing to increase on a weekly basis with current feeding of new crop hay and green chop providing a boost to farm level output. Growth potential is being debated. The strong demand and high prices for beef continue to create opportunities for dairy producers to cull marginal milk cows and replace that animal with a fresh heifer. Dairy plants are running on increasing schedules to process the growing milk supply, but there is adequate capacity.
NEW MEXICO milk supplies are building, as conditions are conducive for seasonal growth. Processing plants are running on extended schedule to handle the growing milk supplies, especially as milk sales out of state have slowed. Class I needs are slightly higher.
ARIZONA weather conditions are generally favorable to milk cows and milk output is steady to slightly lower and continues to trend off the seasonal peak. Demand for Class I milk is a little higher after the holiday weekend. Patterns are expected to be steady until schools and colleges begin to recess in May.
CREAM prices are mainly steady with only slight changes noted for multiples and butter prices. Demand for cream is uneven coming out of an extended holiday weekend with many processing plants taking extra days off.
Ice cream plant demand is slow to develop. There are concerns over cream prices as well as other ingredient costs - dairy, chocolate, sugar, and flavorings - that will squeeze margins as end product consumers use more discretionary income for food and transportation basics.
At the CME Group, the Grade AA butter price closed at $2.0150 on Wednesday, April 27, up 1.5 cents from a week ago. Cream multiples range from 103-122 and vary based on class usage and basing point.
Milk production in the PACIFIC NORTHWEST continues to increase seasonally along expected volumes. Warmer temperatures are returning slowly to the region and cows are responding with increased milk flow. The increased volumes are being handled with most production facilities working extended schedules on weekends. Spring fieldwork is behind in some cases and new crop forages are slow to develop as cool weather hinders growth.
UTAH and IDAHO temperatures are showing wide variations this spring as a short spell of warmer temperatures can be quickly followed with cool wet conditions. Frost and snow in the upper elevations continue to slow spring's arrival. Milk volumes are being readily handled within the region. Improved milk prices have dairy farmers looking to increase herds.
Replacement heifer prices at auction in Idaho are steady to firm with the top heifer at one auction reported at $1635. The top fifty heifers averaged $1440 per head. Planting of spring grains is spotty and reported to be behind schedule. Alfalfa production is also slow to develop.
Robert.Hunter@ams.usda.gov (608)278-4158
Butch.Speth@ams.usda.gov (608)278-4152