MD_DA650 DA MD DA650 Nonfat Dry Milk - Central and East MADISON, WI. March 09, 2017 (REPORT 10) **UPDATED NONFAT DRY MILK - CENTRAL AND EAST CENTRAL: Low/medium heat nonfat dry milk (NDM) prices are mixed. Price changes for low/medium heat NDM result from adjustments based on spot sales and pricing indices. Spot market reports of low/medium heat NDM are less frequent, compared to a relatively busy late February. Spot offers were reported, but end users and buyers are hesitant to take on additional inventories as prices have continued sliding from early January. Some contacts assert that many end users bought surplus loads when the price points began moving downward, thus the domestic market is currently quiet. Regarding export markets, Mexican demand has quieted. Trade relations with Mexico remain a concern with low/medium heat NDM contacts in the Central U.S. With surplus milk supplies, production of NDM continues at active levels. High heat NDM prices remained steady this week. The high heat NDM spot market was quiet. High heat NDM production is light, keeping pace with demand. The market tone remains fair on high heat NDM. Inventories are light, but adequate. **According to NASS, U.S. production of human food nonfat dry milk during January 2017 totaled 155.0 million pounds, 13.1% higher than a year ago and no percentage change from the previous month. Month ending stocks, at 229.0 million pounds are 1.1% higher than a year ago. Cumulative 2017 U.S. year to date nonfat dry milk production through January totaled 155.0 million pounds, 13.1% more than 2016 during the same time span.** The CME Group monthly average price for Grade A NDM during February was $0.9000, compared to $0.7410 a year ago. The DMN monthly average of the mostly price series for Central and East low/medium heat NDM during February was $0.9882, compared to $0.7860 a year ago. EAST: Low/medium heat nonfat dry milk (NDM) prices are steady to lower in the mostly series. Producers continue to see considerable condensed skim move through drying, as lots of low/medium heat NDM is available. As confidence falls out of the market, producers with older inventories are looking to move volume loads prior to the spring peak. Meanwhile, domestic buyers continue to pressure the market, with delayed purchasing, as some anticipate current prices will move lower. Global demand is fair to light. Some see those markets, particularly Mexico, circumventing U.S. NDM powder for the short term. The market undertone is steady to weak. Prices for high heat NDM are unchanged in a fairly quiet market this week. Supplies of high heat NDM remain tight. Producers are limited in available dryer time. The DMN monthly average of the range price series for Central and East low/medium heat NDM during February 2017 was $0.9721, compared to $0.7894 a year ago. The February 2017 monthly average of the range price series for Central and East high heat was $1.1114 compared to $1.0220 a year ago. Wednesday at the CME Group, Grade A NDM closed at $0.8100, down $0.0150 from last Wednesday. DAIRY PRODUCTS: According to NASS, U.S. production of human food nonfat dry milk in the Atlantic region totaled 30.2 million pounds, 2.8% more than a year ago and 6.9% above the previous month. The January 2017 U.S. production of skim milk powder totaled 50.5 million pounds, 1.4% less than a year ago and 7.6% less than last month. Cumulative 2017 U.S. year to date skim milk powder production through January totals 50.5 million pounds, a 1.4% decrease from 2016. F.O.B. CENTRAL/EAST: Includes EXTRA GRADE and GRADE A LOW/MEDIUM HEAT: .8000 - 1.0000 MOSTLY: .8500 - .9300 HIGH HEAT: 1.0625 - 1.1500 The Foreign Agricultural Service (FAS), reports that January 2017 U.S. nonfat dry milk exports totaled 105.2 million pounds, an 11% increase from a year ago. U.S. NDM Exports, H.S. Code 0402100000(FAS) 2017 Exports % Change From (Million Lb.) 1 Year Ago January Total 105.2 + 11 TOTAL, JAN 105.2 + 11 1 Mexico 41.9 - 5 2 Philippines 16.6 + 16 3 Indonesia 11.9 + 81 4 Vietnam 6.7 + 7 5 China 5.5 + 110 1100CT daniel.johnson@ams.usda.gov 608.422.8605 Israel.weber@ams.usda.gov 608.422.8601 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