MD_DA650 DA MD DA650 Nonfat Dry Milk - Central and East MADISON, WI. October 08, 2015 (REPORT 40) NONFAT DRY MILK - CENTRAL AND EAST CENTRAL: Prices for Central low/medium heat nonfat dry milk are up in a mixed market. Some manufacturers report choosing to make NDM over other dry dairy products due to better returns, while other are making and storing until they receive desired pricing levels. Contract negotiations for Q1 2016 are underway as most buyers and seller understand that the prices are starting to stabilize. Some end users report high inventory levels as others report not wanting to build inventories. High heat nonfat dry milk prices are up. Sellers report adequate demand. The CME Group monthly average price for Grade A NDM during September was $0.9045, compared to $1.3554 a year ago. The DMN monthly average of the mostly price series for Central and East low/medium heat NDM during September was $0.8769, compared to $1.4760 a year ago. The September monthly average of the range price series for Central and East high heat was $1.0054 compared to $1.6230 a year ago. The NASS Dairy Products report noted U.S. human NDM production during August in the Central region totaled 21.1 million pounds, 12.1% higher than one year ago. The Central region accounted for 17% of the total U.S. production. Total U.S. human NDM production during August was 124.4 million pounds, 6.7% higher than last year. Total U.S. NDM human month ending stocks for August were 230.9 million pounds, 2.3% below a year ago. During January-August 2015, U.S. human NDM production totaled 1.303 billion pounds, 8.4% more than the same time span in 2014. EAST: Prices for low/medium nonfat dry milk climbed higher in a firming market. This week, nonfat dry milk production dropped slightly. Extreme weather conditions in the region increased Class I demand. Processors in the region are comfortable with current NDM inventories, as diminishing milks supplies lead to reductions in low/medium heat drying schedules. Much of the current low heat nonfat dry milk is moving through sales contracts. Demand is good, with sources noting that buyers are showing active interest in securing product. However, buyers are circumventing the spot market, as trading become increasingly active through resale markets. Prices for high heat nonfat dry milk trended higher. A few processors scheduled high heat NDM production runs this week, which are mostly light. Emphasis is mainly placed on near term orders. Offerings are available from some manufacturers, but tighter from others, as the market firms. The September 2015 DMN monthly average for the Central/East low/medium heat nonfat dry milk range series is $0.8879, compared to $1.4345 a year ago. DAIRY PRODUCTS: According to NASS, the Atlantic region's August 2015 production of nonfat dry milk totaled 24.1 million pounds, 17.1% more than a year ago, but 23.0% less than last month. The August 2015 U.S. production of skim milk powder totaled 39.3 million pounds, 27.2% less than a year ago, but 15.15 more than last month. Cumulative U.S. YTD skim milk powder production through August totaled 293.8 million pounds, 23.7% less than 2014 during the same time span. F.O.B. CENTRAL/EAST: Includes EXTRA GRADE and GRADE A LOW/MEDIUM HEAT: .8850 - 1.1200 MOSTLY: .9400 - 1.0300 HIGH HEAT: 1.0550 - 1.1800 1100CT Daniel.Johnson@ams.usda.gov/Tara.Herbst@ams.usda.gov USDA/AMS/Dairy Market News, Madison, Wisconsin (608)557.7006 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