Lower holiday Class I demand and seasonally higher intakes left eastern balancing plants flooded with fluid milk volumes to handle. 

Culling activity has been reduced from recent months, which also contributed to more milk being available. U.S. dairy cows slaughtered this November declined by 28,000 from October, to 208,000, an 11.9 percent decline.

November 2008’s number is 9,000 lower than November 2007. The comment that “there is plenty of milk to swim through” seems to universally describe what balancing plants were facing.

Balancing plants are challenged to try and stay ahead of the volume of processing intakes. There is a feeling of anticipated relief that schools begin classes this month. In the Northeast, farm milk production continues seasonally increasing with lower Class I demand. This leaves very heavy drying and churning activity to attempt to accommodate the volume of intakes. With some regional ice cream plants remaining closed, there is less call for cream and condensed skim. Middle Atlantic balancing plants continue to receive “almost unbelievable” amounts of milk.

Drying and churning are in full production to try and handle the intakes. Shipments out of the Southeast remain high. There were reports of some tightness in tanker availability, with some tankers forced to sit for up to 20 hours before they were able to unload milk due to plant capacity factors. This has resulted in a reduction of tanker capacity to move condensed skim into Midwestern areas, which increased downward pressure on regional condensed skim prices. Florida experienced very favorable weather for cow comfort, further fueling seasonal production increases.

Strong production coupled with “awful” fluid sales further increased loads leaving the state to 185. Plants continue to hold heavy inventories of fluid milk even with increased shipments out of the state. Fluid demand is expected to increase as production for the school market begins to move back to normal. Cream remains abundantly available on spot markets with some sales near flat market. On the demand side, reduced Class I and Class II demand are factors affecting this situation.  PD