MD_DA210                                                                                  
DA                                                                                        
MD DA210 Fluid Milk and Cream Review - East                                               

MADISON, WI.  July 08, 2009 (REPORT 27)                                                   

EAST FLUID MILK AND CREAM REVIEW                                                          
                                                                                          
FLUID CREAM AND CONDENSED SKIM PRICES IN TANKLOT QUANTITIES:                              
SPOT PRICES OF CLASS II CREAM, DOLLARS PER LB. BUTTERFAT:                                 
  F.O.B. producing plants:  Northeast - 1.4945-1.5543                                    

PRICES OF CONDENSED SKIM, DOLLARS PER LB. SOLIDS, F.O.B. PRODUCING PLANTS:                
Northeast - Class II - includes monthly formula prices -   .84-.92                        
Northeast - Class III - spot prices -   .88-.94                                           

SPOT SHIPMENTS OF GRADE A MILK INTO OR OUT OF FLORIDA                                     
AND OTHER SOUTHEASTERN STATES                                                             
                                                                                          
                        THIS WEEK   LAST WEEK   LAST YEAR                                 
                        IN    OUT   IN    OUT   IN    OUT                                 
                                                                                          
FLORIDA                  0   140     0   111     0   154                                  
SOUTHEAST STATES         0     0     0     0     0     0                                  


Eastern milk production overall is seasonally lower but to a lesser degree than 
normal; especially in the Northeast and Middle Atlantic regions.  Weather has 
been more moderate.  Northeast weather through June and into July is described 
as unchanged - "always 65 and rain".  Middle Atlantic weather has rarely 
included extreme heat.  This has kept production higher than seasonally normal 
and intakes up in balancing plants.  Plant operators observe that the unusually 
moderate weather has re-written the normal script for intake expectations.  Some 
plants continue heavy drying schedules - 7 days a week in some cases - to clear 
intakes.  A pleasant surprise in New England last week into this week was an 
increase in Class I demand which helped ease the pressure on manufacturing.  
Southeast production had previously fallen but rebounded slightly within the 
last week due to a return of more moderate weather.  With more heat on the way, 
this is expected to be a short lived trend reversal.  Even with the brief return 
of moderate weather, regional intakes are low enough that less surplus milk is 
being offered.  This has resulted in reduced cheese production in plants that 
had been producing using surplus milk.  Florida is suffering from flat fluid 
milk sales aggravated by the migration of Floridians to vacation in other parts 
of the country following recent extreme heat topping 100 for a number of 
consecutive days.  The unusually extreme heat, even for Florida, has now 
moderated to normal heat in the 90's.  This caused a slight rebound in milk 
production back to normal July levels.  The rebound in production coupled with 
the recent migration of people to cooler states resulted in a slight increase in 
shipments of milk out compared with last week.  Condensed skim is primarily 
moving under contract, leaving little spot market activity.  This has kept 
prices steady.  Cream continues to be used for heavy ice cream manufacturing 
this week.  That has left churning to be generally for immediate order 
fulfillment.  Some butter manufacturers have opted to sell cream on spot markets 
rather than churn.  Ice Cream production in the Atlantic region in May 2009 
totaled 18.9 million gallons.  The 3 Atlantic Region states listed among the 11 
separately reported states represent a mixed picture for ice cream production.  
May 2009 production increased 12.3% over April in New York, 8.9% in 
Pennsylvania, but declined 21.0% in Tennessee. From May 2008 to May 2009, New 
York production increased 39.1%, Pennsylvania was up 2.0%, but Tennessee was 
down 32.6%.  Yogurt production (plain and flavored) shows strength and growth.  
During May 2009, 325.5 million pounds were manufactured. This represents a 0.6% 
increase over April and a 5.4% increase over May last year.  Cumulative 2009 
production through May totaled 1.6 billion pounds, 5.7% higher than through May 
2008.

100C Eric K. Graf eric.graf@usda.gov