MD_DA770                                                                        
DA                                                                              
MD DA770 Lactose - Central and West                                             

MADISON, WI.  May 11, 2017 (REPORT 19)                                          

LACTOSE - CENTRAL AND WEST                                                      

Prices for lactose are unchanged except the bottom of the range slid lower 
this week. Lactose market participants generally describe the market tone for 
lactose as stable or steady. However, a few contacts note price pressures are 
starting to show up in some export markets. Demand is strong and some buyers 
are seeking contracts for Q3 or Q4 business. Inventories are tight to 
comfortable for highly desired brands and lactose that meets rigid product 
specifications. However, some contacts say stock levels are growing for 
standard lactose that does not meet specific buyer requirements. NASS's Dairy 
Products report shows U.S. lactose production during March 2017 totaled 97.6 
million pounds, a 5.1% increase from one year ago. Year to date lactose 
production through March is 275.0 million pounds, 3.6% more than a year ago. 
Month ending stocks, at 119.0 million pounds, are 7.4% lower than one year 
ago, but 5.1% more than February 2017. According to Eucolait, total annual 
lactose imports, January through March, into China are up 9.5% from the same 
period in 2016. Imports from the U.S. comprise 75.3% of those imports. 
January through March imports of lactose into Japan are up 8.4% from 2016. 
Imports from the United States make up 59.3% of lactose imports into Japan.

Including spot sales and up to 3 month contracts.                               
F.O.B. EDIBLE, NON PHARMACEUTICAL   .3200 - .5700    MOSTLY:   .3700 - .4500    

U.S. Lactose Exports, H.S. Code 1702110000(FAS)
                 2017 Exports      % Change From
                 (Million Lb.)       1 Year Ago

March Total              51.8           + 19

TOTAL, JAN - MAR        139.8           + 7
 1 Mexico                24.2           + 42
 2 China                 21.5           + 7
 3 New Zealand           19.4           - 31
 4 Japan                 12.3           + 12
 5 Indonesia             11.0           + 6


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