Excerpted from the USDA's Dairy Market News, week of Jan. 14 to 18. Download the complete report.

Milk production is steady despite colder and wetter conditions in the Southwest. Arizona milk supplies are heavy. In the Northwest, milk supplies are slowly increasing. Output trends in Utah and Idaho are about steady. Farm milk pickups are on the rise in the Midwest at higher than expected levels.

More loads of spot milk are appearing at pricing $1 to $3 below Class, down from flat pricing a week ago.

Processors are shipping milk longer distances to find a home.

Milk production is increasing and above year ago levels in both the Northeast and Mid-Atlantic regions. Milk is increasing in the Southeast, but heat in Florida is limiting milk output.

Class I demand across the country has regained traction as most schools and colleges are in session. Cream supplies remain heavy and are under pricing pressure.

Annual dairy cow slaughter reached 3.1 million head in 2012, the highest level since 1986. In 1986, USDA began differentiating dairy cow slaughter from total cow slaughter. The 2012 slaughter rate was more than 6% higher than 2011. A review of regional culling indicates that rates were heavier in the Southwest and Northwest, while being lighter in the Upper Midwest compared to last year.