MD_DA650                                                                        
DA                                                                              
MD DA650 Nonfat Dry Milk - Central and East                                     

MADISON, WI.  July 07, 2016 (REPORT 27)                                         

NONFAT DRY MILK - CENTRAL AND EAST                                              
                                                                                

CENTRAL: Prices in the Central region for low/medium heat nonfat dry 
milk are mostly higher this week on light trading. Changes on 
contract indices pulled prices higher in several instances. Dryers 
are full as Central region manufacturers are running full production 
schedules for low/medium heat NDM. Some manufacturers faced with 
tight dryer schedules are making low/medium NDM runs a priority. 
Domestic demand is steady with light spot market activity. Currently, 
U.S. low/medium heat NDM prices are competitive in the international 
market, boosting market involvement from international outlets. Some 
market participants are offering their product at premiums over the 
market, but report light interest at that price level. Inventories 
are long. A few industry contacts are moving 3-6 month, and sometimes 
older, product at the lower end of the price range to alleviate 
inventory pressures. The market undertone is firming. High heat NDM 
prices held steady this week on light trading. Production is on an 
as-needed basis to meet contractual needs. Inventories are light. The 
market undertone is steady. 

EAST: Eastern prices for low/medium heat nonfat dry milk moved higher 
on the range, but are mixed on the mostly series. Some industry 
participants are puzzled by the higher prices as supplies are readily 
available in the spot market. The market undertone is firmer. Demand 
from bakers is improving. Spot sales in the f.o.b. market are more 
active this week. Low/medium heat NDM production is ongoing as 
moderate condensed skim volumes continue clearing into dryers. Many 
processing plants are running at full capacity. Inventories are 
steady to slightly higher. Prices for high heat are unchanged. 
Production is sporadic, mostly dictated by contractual needs. 
Inventories are tight. Consequently, spot sales are limited. The CME 
Group monthly average price for Grade A NDM during June
was $0.8476, compared to $0.8734 a year ago. The DMN monthly average 
of the mostly price series for Central and East low/medium heat NDM 
during June was $0.8221, compared to $0.9414 a year ago. The June 
monthly average of the range price series for Central and East high 
heat was $0.9300 compared to $1.1097 a year ago. The NASS Dairy 
Products report noted U.S. human NDM production during May 2016 in 
the Central region totaled 36.4 million pounds, 28.5 percent higher 
than one year ago. Total U.S. human NDM production during May 2016 
was 165.1 million pounds, 8.3 percent lower than last year. During 
January-May 2016, U.S. human NDM production totaled 783.7 million 
pounds, 8.9 percent less than the same time span in 2015. Total U.S. 
NDM, human, month ending stocks for May were 235.4 million pounds, 
9.9 percent below a year ago. 

F.O.B. CENTRAL/EAST:  Includes EXTRA GRADE and GRADE A                          
LOW/MEDIUM HEAT:   .8300 - .9600          MOSTLY:   .8500 - .8900               
HIGH HEAT:         .8800 - .9800    


1100CT Angel.Teran@ams.usda.gov/Amy.L.Schmitz@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