The May 2009 Class 1 prices in California range from $12.68 in the north to $12.96 in the south. The statewide average Class 1 price based on production is $12.71. The average is $1.11 higher than April 2009 but $6.10 less than May 2008.

California milk production is mostly steady with recent weeks at levels near or below a year ago. The effects of cow culling, reformulated rations and producer base plans are still impacting the milk flow. New-crop hay and green chop are being fed, which is stimulating additional milk. Processors continue to see fat and protein levels below expectations.

Plants are at or near capacity in the state and some milk and/or components are moving out to find a processing home.

Arizona milk output is surprising processors. The thought was that milk peaked for the season a few weeks ago as the flow declined off that level.

In recent days, milk receipts have picked up and surpassed the levels of a few weeks ago. Weather and feed are major reasons. Plants are full and able to take in very little outside milk.

Cream markets are unsettled. Demand for cream has shifted from holiday cream-based items towards ice cream production with butter production remaining active. Multiples and overages have eased slightly.

Many contacts are commenting on the strength of the butter prices, despite the passing of the spring holidays. Tradition would have the butter price ease lower around or after the holiday to compensate for butter to be stored.

The CME Group butter price for Grade AA closed at $1.2025 on Wednesday, April 15, down just 1/4 of a cent from a week earlier. Multiples range from 108-120 FOB and vary depending on class usage and basing points.

Winter weather is still an issue in Utah and Idaho with comments noted mid-April that “I am looking out the window and can’t see across the road”. Conditions are muddy again, adding to cow stress. Most believe that a late spring is now guaranteed. This will not help with cost-of-production issues.

Prices continue to firm a bit at the two heifer sales in the region. The top of the markets vary from $1,580-1,750 and the averages are $1,420-1,600.   PD