MD_DA770                                                                        
DA                                                                              
MD DA770 Lactose - Central and West                                             

MADISON, WI.  February 09, 2017 (REPORT 6)                                      

LACTOSE - CENTRAL AND WEST                                                      

Lactose prices held steady for the week. Manufacturers report solid 
production with good yields. Processors say inventories are comfortable to 
tight for most mesh sizes. However, there is slightly more availability of 
unground lactose and lactose that does not meet higher end product 
specifications. Demand is good. A few manufacturers are starting in on Q2 
contracting and have locked in some early shoppers. Buyers from Oceania are 
making regular purchases to stay in the market, even as milk production is 
decreasing in the Southern Hemisphere. A few industry contacts note there is 
some EU competition in Southeast Asia and New Zealand. The market tone is 
steady. Some contacts suggest the lactose market is aided by robust permeate 
demand. The January 2017 Dairy Market News average of the mostly price series 
for Central and West lactose was $0.3718, compared to $0.3633 one month ago 
and $0.2061 one year ago. NASS's Dairy Products report shows U.S. lactose 
production during December 2016 totaled 93.4 million pounds, a 2.5% increase 
from one year ago. Year to date lactose production through December is 1.089 
billion pounds, 3.8% more than a year ago. Month ending stocks, at 101.4 
million pounds, are 1.7% lower than one year ago, and 0.4% lower than 
November 2016. At the GDT Event 181 on February 7, lactose prices across all 
contract periods averaged $0.4128 per pound, up 12.4%.

Including spot sales and up to 3 month contracts.                               
F.O.B. EDIBLE, NON PHARMACEUTICAL   .2400 - .5800    MOSTLY:   .3400 - .4100    

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

December Total            50.3           + 19

TOTAL, JAN - DEC         579.5           + 12
 1 New Zealand            99.7           + 42
 2 China                  94.6           + 13
 3 Mexico                 74.1           + 8
 4 Japan                  47.6           + 15
 5 Indonesia              43.5           + 55


1100CT Mike.Bandli@ams.usda.gov 608.422.8592
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