The December 2008 Class 1 prices in California range from $16.57 in the north to $16.84 in the south. The statewide average Class 1 price based on production is $16.59. The average is $2.16 lower than November 2008 and $6.42 lower than December 2007.

Weather conditions have taken a turn for the worse in the Pacific Northwest, especially western Washington. According to news reports in the Seattle Post-Intelligencer, a warm but powerful Pacific rainstorm moved through Western Washington on November 12, 2008 bringing major and near-record flooding to that part of the region. Up to 10 inches of rain could fall in the Cascade and Olympic mountain ranges causing major flooding in affected river basins. Temperatures are expected in the high 50’s which will mean that the snowline stays relatively high. The Flood Alert Center reported many roads to be impassable. It remains to be seen how this will affect milk production and processing.

More financial stress is noted in the region as dairies go into their lending institutions to finalize hay purchase plans and find that the bank may want to loan money for immediate needs only and not to purchase ahead at all. Others have found their once larger lines of credit reduced to what they have actually been using in recent months with no cushion left. Those producers that locked in grain prices a number of weeks ago and did not lock in milk prices are facing major losses. Those that are operating on a more current basis are noting that their cost of production may be down $1.00-1.50 per hundredweight. Hay prices remain a concern, but they are moving lower in instances also. Heifer prices are $150-200 higher ($1700-2000 for top springers) than last month mostly due to better demand.

Good rain and snow showers are common over much of Utah and Idaho. The moisture is welcomed by all of agriculture. Milk production is nearing the seasonal low point.

Some producers are indicating that they are suffering more financially even with some lower reported feed costs. Plants are able to secure as much milk as they want with some plants looking to sell some milk to limit finished product output.

Prices were reported at two heifer sales in the region. The top of the market was $1980-2000 and the average was $1710-1895.  PD