MD_DA650                                                                        
DA                                                                              
MD DA650 Nonfat Dry Milk - Central and East                                     

MADISON, WI.  January 05, 2017 (REPORT 1)                                       

NONFAT DRY MILK - CENTRAL AND EAST                                              

CENTRAL: Central low/medium heat nonfat dry milk (NDM) f.o.b. prices 
are mixed on the range, but shifted higher on the mostly series. Spot 
sales activity is light as most transactions are based on contracts. 
According to some industry participants, the recent SMP upward 
pricing movement at the GDT is boosting domestic values. The market 
undertone is steady to firmer, according to some manufacturers. 
However, some buyers are puzzled about the current market conditions, 
taking a wait, and see attitude, anticipating lower prices in the 
near future. Most processing plants continue actively processing NDM. 
Stocks are growing, but are highly committed to cover Q1 contract 
requirements. High heat nonfat dry milk prices are slightly higher on 
light trading. Production is intermittent, mostly based on 
contractual needs. Inventories are very tight. EAST: East region 
low/medium heat nonfat dry milk prices are mixed on the range, but 
higher on the mostly price series on an unsettled market. While some 
international markets stepped higher for skim milk powder, market 
participants are trying to figure out how those prices relate to an 
domestic market with steady to building regional inventories. The 
past week was very active for processors in the East region. Modest 
growth in Class I demand helped dilute the pressure on balancing 
plants to clear growing intake volumes. With active low/medium heat 
production in the region, inventories were generally steady to higher 
for early January. Despite the growth in inventories, many 
manufacturers anticipate a steady to firmer market in the months 
ahead. Because of this view, manufacturers are not quick to offer 
bargain prices on Q4 production. Some pricing leeway exists for Q2/Q3 
production. High heat NDM prices are higher on light availability. 
The market tone is firm. Production is currently limited to 
occasional runs related to contract fulfillment. The DMN monthly 
average of the mostly price series for Central and East low/medium 
heat NDM during December 2016 was $0.9815, compared to $0.8541 a year 
ago. The December 2016 monthly average of the range price series for 
Central and East high heat was $1.1202 compared to $1.0366 a year 
ago.

                                                                                
F.O.B. CENTRAL/EAST:  Includes EXTRA GRADE and GRADE A                          
LOW/MEDIUM HEAT:   .9200 - 1.0800         MOSTLY:   .9500 - 1.0500              
HIGH HEAT:        1.1000 - 1.1800                                               


1100CT angel.teran@ams.usda.gov  (608)557.7011 & 
janet.linder@ams.usda.gov  (608)557-7003
USDA/AMS/Dairy Market News, Madison, Wisconsin 
Dairy Market News website: http://www.ams.usda.gov/market-news/dairyy
Dairy Market News database portal: 
http://www.marketnews.usda.gov/mnp/da-home