MD_DA640                                                         
DA                                                               
MD DA640 Nonfat Dry Milk - West                                  

MADISON, WI.  February 09, 2017 (REPORT 6)                       

NONFAT DRY MILK - WEST                                           

The f.o.b. spot pricing for western low/medium nonfat dry milk (NDM) 
is mixed as some sales, based on specific brand, pushed up the top of 
the range. Nevertheless, prices are lower on the mostly series, in 
line with downward movements on various indices. Spot trading 
activity is light to moderate. Currently, the market undertone is 
unsettled. Several buyers are pushing strong in the spot market in 
order to get lower values. As a result, some manufacturers have been 
forced to drop prices to cover immediate needs from buyers. 
Conversely, a few NDM processors are stocking inventories with the 
hope that prices will rise during the upcoming spring baking season. 
Furthermore, some manufacturers are confident about price trends in 
the future markets. Demand for low/medium NDM from Mexico is waning 
as some Mexican buyers/end users are looking to buy NDM/SMP from 
other countries aside from the United States. In addition, Mexican 
SMP production has been stronger compared to a couple of weeks ago. 
Back into the U.S. markets, low/medium heat NDM production is active 
throughout the western region as milk intakes step seasonally higher. 
Therefore, more farm milk is clearing through balancing plants into 
NDM. Low/medium heat NDM inventories are steady to building. High 
heat nonfat dry milk prices are lower on light trading. Supplies are 
steady. Most sales are based on contracts. Production is light as 
manufacturers are opting to maximize clearing condensed skim through 
low/medium NDM production. The CME Group monthly average price for 
Grade A NDM during December was $1.0043, compared to $0.7312 a year 
ago. The January 2017 Dairy Market News monthly average for the West 
low/medium heat nonfat dry milk mostly series is $1.0320 compared to 
$.7399 a year ago. The average for Western high heat nonfat dry milk 
is $1.1190 compared to $.9680 a year ago. The NASS Dairy Products 
report noted U.S. human NDM production during December 2016 in the 
West region totaled 94.5 million pounds, 3.3 percent higher than one 
year ago, and 30.8 percent above the previous month. Total U.S. human 
NDM production during December 2016 was 156 million pounds, 3.2 
percent higher than last year. During January-December 2016, U.S. 
human NDM production totaled 1.750 billion pounds, 4.0 percent less 
than the same period in 2015. Total U.S. NDM, human, month ending 
stocks for December were 228.4 million pounds, 11.8 percent above a 
year ago. 
                          
F.O.B. WEST:  Includes EXTRA GRADE and GRADE A                   
LOW/MEDIUM HEAT:     .8800 - 1.0800   MOSTLY:   .9700 - 1.0200    
HIGH HEAT:          1.0800 - 1.1700                              


1100CT Angel.Teran@ams.usda.gov 608-557-7011
USDA/AMS/Dairy Market News, Madison, Wisconsin Dairy Market News 
website: http://www.ams.usda.gov/market-news/dairy
Dairy Market News database portal: 
http://www.marketnews.usda.gov/mnp/da-home