MD_DA770                                                                        
DA                                                                              
MD DA770 Lactose - Central and West                                             

MADISON, WI.  September 08, 2016 (REPORT 36)                                    

LACTOSE - CENTRAL AND WEST                                                      

Lactose prices moved higher this week. A few Q3 contracts anchor the lower 
end of the price range in place; manufacturers report pushing for higher 
prices on Q4 contracts. Processors say a few Q4 deals have been signed and 
buyers, eager to gain coverage for the coming months, are generally taking 
the offers with limited push back. Some volume customers, however, are 
balking at the higher prices and are seeking longer contract terms. They say 
the higher prices are prompting the EU lactose manufacturers to initiate more 
activity. Inventories at many U.S. manufacturing facilities remain tight with 
demand outstripping supply. Lactose production continues at an active pace. 
The August 2016 Dairy Market News average of the mostly price series for 
Central and West lactose was $0.2948, compared to $0.2769 one month ago and 
$0.1912 one year ago. NASS's Dairy Products report shows U.S. lactose 
production during July 2016 totaled 97.7 million pounds, an 8.2% increase 
from one year ago. Year to date lactose production through July is 632.3 
million pounds, 1.9% more than a year ago. Month ending stocks, at 115.1 
million pounds, are 9.8% lower than one year ago, and 4.6% lower than June 
2016. 

Including spot sales and up to 3 month contracts.                               
F.O.B. EDIBLE, NON PHARMACEUTICAL   .2300 - .4050    MOSTLY:   .2800 - .3600    


U.S. Lactose Exports, H.S. Code 1702110000(FAS)
                 2016 Exports      % Change From
                 (Million Lb.)       1 Year Ago

July Total                46.2           - 7

TOTAL, JAN - JULY         322.7          + 3
 1 China                  57.4           + 5
 2 New Zealand            56.1           + 42
 3 Mexico                 41.7           + 11
 4 Japan                  26.7           + 22
 5 Indonesia              26.2           + 63


1100CT Mike.Bandli@ams.usda.gov (608) 557-7010
USDA/AMS/Dairy Market News, Madison, Wisconsin
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