MD_DA770 DA MD DA770 Lactose - Central and West MADISON, WI. July 13, 2017 (REPORT 28) LACTOSE - CENTRAL AND WEST Lactose prices are steady to lower based on spot sales and initial Q3 contracted prices. Industry contacts say lactose demand in Southeast Asia has evaporated as lower hog prices have curtailed purchases of dairy proteins and lactose used in making pig feeds. Lactose demand from Oceania is picking up as the milk production season nears. Manufacturers say domestic lactose demand is mixed. Some regular contracted buyers are taking a few extra loads, but others are taking a wait and see approach to their purchases. Processors are hoping the standardization market and domestic market can help stabilize lactose prices. Lactose production is steady and inventories are comfortable, but growing slightly. NASS's Dairy Products report shows U.S. lactose production during May 2017 totaled 94.8 million pounds, a 1.8 percent increase from one year ago, but 1.2 percent less than last month. Year to date lactose production through May is 465.5 million pounds, 3.4 percent more than a year ago. Month ending stocks, at 126.9 million pounds, are 1.1 percent lower than one year ago, but 11.4 percent more than April 2017. Including spot sales and up to 3 month contracts. F.O.B. EDIBLE, NON PHARMACEUTICAL .2800 - .4900 MOSTLY: .3400 - .4200 U.S. Lactose Exports, H.S. Code 1702110000(FAS) 2017 Exports % Change From (Million Lb.) 1 Year Ago May Total 44.3 - 11 TOTAL, JAN - MAY 234.5 + 4 1 China 38.7 - 7 2 Mexico 36.6 + 24 3 New Zealand 31.8 - 22 4 Japan 19.2 + 2 5 Indonesia 15.8 - 16 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