MD_DA770                                                                        
DA                                                                              

MD DA770 Lactose - Central and West **UPDATED 
                                            

MADISON, WI.  March 12, 2015 (REPORT 10)                                        

LACTOSE - CENTRAL AND WEST                                                      
                                                                                
Lactose prices on the mostly series and the top of the range shifted lower 
as the market continues to show signs of oversupply. Lactose sellers 
indicate discussions with many offshore buyers regarding Q2 contracting 
included some backlash from the west coast shipping delays. Those buyers 
focusing on just in time purchasing were more vulnerable to supply 
problems because of those shipping delays. Buyers indicate the work 
slowdown and strike highlighted the vulnerability of having suppliers from 
one continental area. To balance out the possibility of future supply 
disruptions, some buyers are opting to reshuffle supplier volume 
allocations. To that end, some Oceania destined volumes have been awarded 
to EU-based sellers. The gloominess of the edible market does offer some 
opportunities for feed blending operations. A few lactose producers and 
resellers reported receiving under the market bids for lactose from feed 
producers. Some bids were turned away, others were not. Lactose production 
is ongoing. Some manufacturers report the pay prices for milk compared to 
the returns from whey stream products has made it a difficult first 
quarter financially. In addition, some cheese plant managers have had no 
opportunity to sell into the fluid market, thus keeping more milk flowing 
through cheese vats. Lactose inventories are higher. Some manufacturers 
noted their holdings, which may be higher than planned because of shipping 
issues, are largely committed to contract fulfillment. Other producers 
indicate they are looking for ways to lower inventories in the near term.

Including spot sales and up to 3 month contracts.                               
F.O.B. EDIBLE, NON PHARMACEUTICAL   .1800 - .3950    MOSTLY:   .2000 - .3000    

U.S. Lactose Exports, H.S. Code 1702110000(FAS)
                 **2015 Exports      % Change From
                 (Million Lb.)       1 Year Ago

January Total      33.2        - 19


Year to Date Total     33.2          - 19

 1 Mexico              6.4           + 18
 2 China               4.9           + 78
 3 Singapore           3.4           + 187
 4 New Zealand         3.4           - 53
 5 South Korea         3.2           + 256

1100CT Janet.Linder@ams.usda.gov 608.278.4157
USDA/AMS/Dairy Market News, Madison, Wisconsin
Dairy Market News website: www.ams.usda.gov/dairymarketnews
Dairy Market News database portal: http://www.marketnews.usda.gov/mnp/da-home