MD_DA640 DA MD DA640 Nonfat Dry Milk - West MADISON, WI. March 09, 2017 (REPORT 10) NONFAT DRY MILK - WEST Western low/medium heat nonfat dry milk (NDM) f.o.b. spot prices are down on both the range and mostly series. In the same way, NDM futures prices shifted lower, too. Many NDM processors have had to reduce prices to be more competitive in the market. Spot trading is light as most sales are based on contracts this week. With various NDM contract base indices trending down, some NDM buyers are delaying Q2 negotiations, expecting lower values in the near term. The NDM market conditions are steady to weaker, as there is an increasing oversupply. Overall, buyers/end users' interest is light. However, the current NDM values are attracting the attention of some WPC34% customers. Low/medium heat NDM production is steady to higher as regional farm milk intakes trend upward. Many NDM manufacturers are clearing large stocks to have sufficient storage space to accommodate high NDM/SMP supplies throughout the spring flush. Therefore, some NDM producers are selling NDM loads from 2016 at prices around the low end of the pricing range. Demand from Mexico is sluggish. The uncertainty about free trade agreements, the strong U.S. currency, and higher Mexican milk production are the main factors contributing to a light NDM/SMP interest from Mexico. High heat NDM production increased slightly at some regional plants. Inventories are sufficient for fulfilling customer orders. Prices for high heat nonfat dry milk shifted slightly down this week. The CME Group monthly average price for Grade A NDM during February was $0.9000, compared to $0.7410 a year ago. The February 2017 Dairy Market News monthly average for the West low/medium heat nonfat dry milk mostly series is $0.9758 compared to $.7296 a year ago. The average for Western high heat nonfat dry milk is $1.1116 compared to $.9648 a year ago. The NASS Dairy Products report noted U.S. human NDM production during January 2017 in the West region totaled 96.1 million pounds, 16.9 percent higher than one year ago, and 1.7 percent above the previous month. Total U.S. human NDM production during January 2017 was 155.0 million pounds, 13.1 percent higher than last year. Total U.S. NDM, human, month ending stocks for January were 229.0 million pounds, 1.1 percent above a year ago. According to California Department of Food and Agriculture (CDFA), January 2017 nonfat dried milk (NDM) production in California totaled 53.5 million pounds, 13.9% higher than a year ago. According to FAS, during January, U.S. NDM exports totaled 105.2 million pounds, 11% higher than a year ago. F.O.B. WEST: Includes EXTRA GRADE and GRADE A LOW/MEDIUM HEAT: .7700 - 1.0000 MOSTLY: .8200 - .9350 HIGH HEAT: 1.0250 - 1.1350 U.S. NDM Exports, H.S. Code 0402100000(FAS) 2016 Exports % Change From (Million Lb.) 1 Year Ago January Total 105.2 + 11 TOTAL, JAN 105.2 + 11 1 Mexico 41.9 - 5 2 Philippines 16.6 + 16 3 Indonesia 11.9 + 81 4 Vietnam 6.7 + 7 5 China 5.5 + 110 1100CT Angel.Teran@ams.usda.gov 608.422.8593 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