The following is an excerpt from Dairy Market News for the week of May 1 to 5. Read the full report here.
The director of a western organic dairy producer organization estimates a 2017 U.S. organic milk surplus of 50 million gallons. Some of this milk is being sold into conventional milk markets. In the longer run, the current oversupply is generally expected to ease as new processing and sales outlets are developed. That is no immediate comfort to organic producers left without organic markets.
For example, a large national organic dairy coop expects 5% growth in milk receipts this year and next year. However, it has imposed a quota on members and stopped contracting with new members in March. This week, organic milk accounts for 67% of total organic dairy retail ad numbers by commodity, with the highest volume of ads reported for half gallon packaged organic milk.
Milk production in Central states is at flush levels; steady in California
Fluid milk production is mixed across the country this week. In the Northeast and Mid-Atlantic, production continues at expected, seasonal levels. In the Central U.S., production is at flush levels. Steady milk production continues in California, but it is expected to decline with higher temperatures.
Milk output increased in the Pacific Northwest. Arizona and New Mexico, however, are seeing lower production levels. Bottling demand is mixed. Midwest, Pacific Northwest and California bottling sales were steady. In Florida, Class I demand has softened. Heavy snowfall in Kansas delayed some bottling intakes due to transportation issues and plant power outages. Class III milk prices ranged from $3.00 to $6.00 under Class. Some Midwestern cheese plants, previously unable to take on spot milk, have begun taking on extra spot milk. Cream supplies are generally available across the country. Western contacts reported an uptick in cream orders from ice cream and frozen yogurt makers. This week, Class II multiples ranged in the East, 1.05-1.25; Midwest, 1.15-1.22, and West, 1.08-1.18.