MD_DA640                                                         
DA                                                               
MD DA640 Nonfat Dry Milk - West                                  

MADISON, WI.  January 08, 2015 (REPORT 1)                        

NONFAT DRY MILK - WEST                                           

Prices for low/medium heat nonfat dry milk are mixed, following movements 
on various pricing bases. The market tone remains weak.  Buyer interest in 
contracting on a quarterly, 6 month, or annual basis has been light, as 
the market has offered a ready supply of loads as needed.  However, now 
that 2015 is underway, there is some expectation that end users will want 
to know their cost basis for the near term. Low/medium heat nonfat dry 
milk production is active at most locations.  However, as colder 
temperatures swept through areas of the southwest, some operations ran 
into problems with freezing pipes and other issues exacerbated by the cold 
weather.  These problems slowed throughput and lowered day-to-day output 
of low/medium heat NDM. Western high heat nonfat dry milk prices shifted 
lower across the range, in step with pricing bases.  Production is light 
and based on near term contract needs. Interest outside of contracts is 
negligible. According to NASS, in November 2014, California produced 61.1 
million pounds of NDM, about 40.6% of the national monthly production.  
NDM production in the West region totaled 103.8 million pounds, 50.4% more 
than one year ago.  This is about 69.0% of total November production in 
the U.S.  Cumulative Western region 2014 production totals 1.082 billion 
pounds, an 18.1% increase compared to 2013.  The December 2014 Dairy 
Market News average of the mostly price series for Western low/medium 
heat nonfat dry milk was $1.1225 compared to $2.0036 one year ago.  
The average for Western high heat nonfat dry milk was $1.4328 compared 
to $2.0330 one year ago.  

DAIRY PRODUCTS:  NASS reports U.S. production of human food NONFAT DRY 
MILK during November 2014 totaled 150.7 million pounds, a 48.9% 
increase from one year ago.  Cumulative nonfat dry milk production for 
2014 totals 1.597 billion pounds, 18.1% higher than 2013.  Month 
ending stocks, at 216.9 million pounds, are 89.7% higher than one year 
ago.  November 2014 production of SKIM MILK POWDERS, which includes 
protein standardized and blended product, totaled 30.6 million pounds, 
45.5% lower than one year ago.  Cumulative 2014 skim milk powder 
production totals 491.9 million pounds, a 14.1% decrease compared to 
2013.  

F.O.B. WEST:  Includes EXTRA GRADE and GRADE A                   
LOW/MEDIUM HEAT:     .9500 - 1.1900   MOSTLY:   .9900 - 1.1000    
HIGH HEAT:          1.2300 - 1.3800                              

1100CT Janet.Linder@ams.usda.gov 608.278.4157
USDA/AMS/Dairy Market News, Madison, Wisconsin
Dairy Market News website: www.ams.usda.gov/dairymarketnews
Dairy Market News database portal: www.marketnews.usda.gov/mnp/da-home