MD_DA650 DA MD DA650 Nonfat Dry Milk - Central and East MADISON, WI. January 15, 2015 (REPORT 2) NONFAT DRY MILK - CENTRAL AND EAST CENTRAL: Some low/medium heat nonfat dry milk (NDM) suppliers made large volume sales at lower prices as reflected in the bottom of the mostly price series. Additional market participants finalized 2015 contracts with many making index basing point changes mostly tied to the CME Group NDM prices. The undertone is softening with supplies readily available at discounted rates. Production is mostly steady with some manufacturers producing at capacity, while others seen marginal declines as more milk went into Class I this week. Domestic demand is light as buyers have many options available. Export interest is starting to pick up, most notably in Mexico, as U.S. prices are becoming more competitive with international markets. HIGH HEAT NDM prices shifted significantly lower due to contract basing point adjustments and reduced F.O.B spot sale prices. However, supplies of high heat NDM are limited as low/medium heat NDM production remains strong, restricting dryer time for high heat NDM production. Buyer interest is light to moderate. Wednesday at the CME Group, Grade A NDM closed at $0.9550, down $0.0450 from last Wednesday. According to FAS, January-November U.S. NDM exports totaled 1.128 billion pounds, an increase of 0.2% compared to the same time span in 2013. EAST: Eastern low heat nonfat dry milk prices declined. Current production schedules are very active in the Northeast but lessening in the Mid-Atlantic region where good Class I demand has pulled milk away from dryers. Spot sales of low heat NDM by some manufacturers to clear inventories created sales volume at the lower end of the price range. This clearing activity is mostly played out. Buying demand has been generally good, but increased inventories built up over holiday weeks have been a significant factor pushing prices lower. Eastern high heat nonfat dry milk prices have also declined. Lower manufacturing milk volumes have allowed some increases in high heat nonfat dry milk production in the region. Some buyers with sufficient current inventories for immediate needs are slowing high heat buying, believing that current prices are expensive. F.O.B. CENTRAL/EAST: Includes EXTRA GRADE and GRADE A LOW/MEDIUM HEAT: .9500 - 1.1900 MOSTLY: .9800 - 1.1050 HIGH HEAT: 1.0475 - 1.2800 U.S. NDM Exports, H.S. Code 0402100000(FAS) 2014 Exports % Change From (Million Lb.) 1 Year Ago November Total 93.9 - 7 TOTAL, JAN - NOV 1,128.4 + 0.2 1 Mexico 411.6 + 12 2 Philippines 151.3 + 27 3 China 101.3 - 16 4 Indonesia 93.6 - 20 5 Vietnam 74.3 - 2 1100CT eric.graf@ams.usda.gov & Ryan.Studnicka@ams.usda.gov USDA/AMS/Dairy Market News, Madison, Wisconsin Dairy Market News website: www.ams.usda.gov/dairymarketnews Dairy Market News database portal: http://www.marketnews.usda.gov/mnp/da- home