MD_DA650 DA MD DA650 Nonfat Dry Milk - Central and East MADISON, WI. November 05, 2015 (REPORT 44) NONFAT DRY MILK - CENTRAL AND EAST CENTRAL: Prices for low/medium heat nonfat dry milk in the Central region shifted lower following declines in various indices. The market tone is weak. Buyers report offers from second tier sellers are frequent, with implied abilities to handle orders ranging from single orders to blocks. These offers carry prices that are competitive with those being offered by manufacturers within the region, and the resale offers are putting pressure on the f.o.b. market. In some cases, resellers may be offering comparable/identical brands as loads transition from end users, who purchased NDM earlier in the year, to resellers. Calendar pressure may also play some part in pricing as manufacturers and resellers determine how much stock should be carried into 2016. Low/medium heat NDM production is active as milk production in the region is steady and above year ago levels. Low/medium heat NDM inventories are steady to building. The CME Group monthly average price for Grade A NDM during October was $0.9333, compared to $1.3345 a year ago. The DMN monthly average of the mostly price series for Central and East low/medium heat NDM during October was $0.9790, compared to $1.4277 a year ago. High heat NDM prices, Central, shifted higher on the bottom of the range based on steady to higher seasonal demand from bakery accounts. Inventories are limited. With steady milk intakes propelled by above normal November temperatures and some fall calving, some manufacturers are focusing on clearing condensed skim into low heat NDM. Thus, high heat NDM inventories tend to be augmented on a just in time basis. The October monthly average of the range price series for Central and East high heat was $1.1235 compared to $1.5494 a year ago. The NASS Dairy Products report noted U.S. human NDM production during September in the Central region totaled 19.1 million pounds, 10.3% higher than one year ago. Total U.S. human NDM production during September was 120.5 million pounds, 7.3% higher than last year. During January-September 2015, U.S. human NDM production totaled 1.423 billion pounds, 8.3% more than the same time span in 2014. Total U.S. NDM human month ending stocks for September was 211.5 million pounds, 24.6% above a year ago. EAST: Prices for low/medium nonfat dry milk dipped sharply as spot trading and various basing points moved lower. Production is steady, at seasonal levels. The ability to purchase NDM in the spot market continues to improve as buyers use "wait-and-see" routines to address current market dynamics. Overall, producers' stocks of NDM are gradually building, with supplies varying among plants. Some buyers are favoring WPC as an alternative cost-effective dairy ingredient over NDM. Domestic demand is mixed but generally active, as market prices look to stabilize. High heat nonfat dry milk still commands a premium, as active seasonal interest develops with limited supplies available. Prices moved higher at the bottom of the range. Contacts note a push in the manufacturing of high heat nonfat dry milk. The bulk of current output is committed to contracts, with few reports of spot activity this week. The market undertone is unsettled. At the CME Group, Grade A NDM closed Wednesday at $0.8050, down $0.0150 from last week at this time. F.O.B. CENTRAL/EAST: Includes EXTRA GRADE and GRADE A LOW/MEDIUM HEAT: .8200 - .9875 MOSTLY: .8400 - .9200 HIGH HEAT: 1.0650 - 1.1800 U.S. NDM Exports, H.S. Code 0402100000(FAS) 2015 Exports % Change From (Million Lb.) 1 Year Ago September Total 104.7 + 47 TOTAL, JAN - SEPTEMBER 928.4 - 2 1 Mexico 393.8 + 19 2 Philippines 114.6 - 9 3 Indonesia 70.8 - 6 4 China 54.8 - 41 5 Vietnam 54.4 - 23 1100CT Daniel.Johnson@ams.usda.gov/Janet.Linder@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