MD_DA640                                                         
DA                                                               
MD DA640 Nonfat Dry Milk - West                                  

MADISON, WI.  May 04, 2017 (REPORT 18)                           

NONFAT DRY MILK - WEST                                           
                                          
In the West region, f.o.b. spot prices for low/medium heat nonfat dry milk 
(NDM) are mixed on the range, but slightly higher on the mostly series. 
The spot sales activity has been more active, compared to a few weeks ago. 
Industry participants have different opinions about what is happening in 
the NDM market. According to some processors, NDM prices are firming due 
to a higher international demand, especially from Mexico. Meanwhile some 
buyers/end users think NDM producers are holding stocks ahead of higher 
future values. In this way, low/medium heat inventories appear to be less 
accessible in some areas of the West region. On the other hand, some 
traders remain puzzled about upward NDM pricing trends. According to them, 
there is no economic logic to explain the rise in NDM prices since the 
supply is broad and is above the current consumers' demand. Furthermore, a 
few processors are clearing 8-10 months old inventories at prices close to 
the bottom of the range. The domestic demand from bakers is steady, but 
active from cheese processors. Production of low/medium heat nonfat dry 
milk is ongoing, prompted by seasonally strong farm milk output. In 
general, inventories are steady to building in most processing plants. 
Prices for high heat nonfat dry milk are up, in line with low/medium heat 
NDM values. Sales activity outside contracts is light. Production is 
sporadic based on filling near-term contractual obligations between 
parties. Inventories are slightly tight in the f.o.b. spot market. 

The CME Group monthly average price for Grade A NDM during April was 
$0.8347, compared to $0.7306 a year ago. 

The April 2017 Dairy Market News monthly average for the West low/medium 
heat nonfat dry milk mostly series is $0.8325 compared to $0.7357 a year 
ago. The average for Western high heat nonfat dry milk is $0.9772 compared 
to $.9340 a year ago. 

At the GDT Event 187 on May 2, skim milk powder (SMP) prices across all 
contract periods averaged $.8990 per pound, down 0.9% from the last event.


F.O.B. WEST:  Includes EXTRA GRADE and GRADE A                   
LOW/MEDIUM HEAT:    .7975 -  .9000   MOSTLY:   .8300 - .8800      
HIGH HEAT:          .9450 - 1.0525                               


1100CT AJ Ter n 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-
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