Class I Utilization Dips Below 10% in Midwest

June 16, 2014 08:55 AM

Fluid milk Class I utilization dipped below 10% in the Upper Midwest in May, only the second time this has occurred. The May Class I utilization came in at 9.9%. Last June, it dipped as low as 9.45%.

Fluid sales have been falling steadily for at least the last five years. For example, May 2010 fluid sales were 358 million lb. This year, that number was just 301 million lb., a decline of 16%.

Total milk marketed in the Upper Midwest Federal Order was 3.039 billion lb. in May. That’s up 194 million lb. from a year ago, and may partially explain the lower Class I utilization percentage.

But the five-year average for total May milk is 2.968 billion lb. So May total milk production is up 71 million lb. over the five-year average, or 2.4%.

The good news is that the Upper Midwest producer price differential is still 43¢/cwt. That’s the highest it has been this year. The highest previous PPD in 2014 was paid in January--20¢/cwt.

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