MD_DA650 DA MD DA650 Nonfat Dry Milk - Central and East MADISON, WI. December 10, 2015 (REPORT 49) NONFAT DRY MILK - CENTRAL AND EAST CENTRAL: The Central low/medium heat nonfat dry milk range price series shifted lower on each end, as did the bottom of the mostly series. Manufacturers are reluctant to clear product at lower prices, but the market has yet to establish a solid basis for price growth. Many transactions are limited to just in time purchasing, as buyers and sellers disagree on market fundamentals beyond that time frame. Negotiations for 2016 contracts are ongoing, with moderate progress. Sellers note buyers are trying to match current CME Group trading prices while discussing 2016 contracts, while also shopping for specific brands and other characteristics. This has stalled some talks as the two purchasing structures, CME Group spot versus f.o.b. contract, are not equivalent in the options offered. Low/medium heat NDM production is steady to somewhat higher as interest from a few Class III plants has subsided. Inventories are mixed, ranging from tight to having spot loads available. High heat prices are unchanged to lower on a weaker market. With much of the holiday baking season in the past, high heat NDM demand is lighter. Inventories vary, with most plant operators stating holdings are steady. Production is light. The CME Group monthly average price for Grade A NDM during November was $0.7822, compared to $1.1724 a year ago. The DMN monthly average of the mostly price series for Central and East low/medium heat NDM during November was $0.8724, compared to $1.3119 a year ago. The November monthly average of the range price series for Central and East high heat was $1.0925 compared to $1.5425 a year ago. The NASS Dairy Products report noted U.S. human NDM production during October in the Central region totaled 24.0 million pounds, 1.9 percent higher than one year ago. DAIRY PRODUCTS: Total U.S. human NDM production during October was 118.7 million pounds, 11.9 percent lower than last year. During January-October 2015, U.S. human NDM production totaled 1.541 billion pounds, 6.4 percent more than the same time span in 2014. Total U.S. NDM human month ending stocks for October was 183.6 million pounds, 1.5 percent below a year ago. EAST: Eastern low/medium nonfat dry milk prices in the mostly series are steady to lower. Production rates dipped somewhat this week as Class I and II resumed pre-holiday pulls on milk supplies toward yearend holiday needs. Also, sources report maintenance projects are being carried out, reducing dryer schedules at some plants. Market interest is mixed and relaxed, as buyers postpone NDM purchases in anticipation of improved offers and lower prices. However, a few processors in the region are maintaining higher price points that represent the upper end of the NDM pricing range, as the market gradually weakens. Demand for condensed skim to cheese producers is steady to fair. A weakening cheese market could bring lower demand for condensed skim and NDM. Contract negotiations for 2016 are continuing with some uncertainty of supply and prices. The market undertone remains weak. High heat nonfat dry milk prices are steady to lower. Sales activity is light. Current production levels are adequate for immediate needs. At the CME Group, Grade A NDM closed Wednesday at $0.7525, down $0.0475 from last Wednesday. The Foreign Agricultural Service (FAS), reports that October 2015 U.S. nonfat dry milk exports totaled 109.8 million pounds, a 29% increase from a year ago. F.O.B. CENTRAL/EAST: Includes EXTRA GRADE and GRADE A LOW/MEDIUM HEAT: .8000 - .9200 MOSTLY: .8400 - .8800 HIGH HEAT: .9000 - 1.1800 U.S. NDM Exports, H.S. Code 0402100000(FAS) 2015 Exports % Change From (Million Lb.) 1 Year Ago October Total 109.8 + 29 TOTAL, JAN - OCT 1,038.2 N.C. 1 Mexico 456.7 + 26 2 Philippines 123.8 - 13 3 Indonesia 75.7 - 12 4 Vietnam 61.3 - 17 5 China 57.2 - 41 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