MD_DA640                                                         
DA                                                               
MD DA640 Nonfat Dry Milk - West                                  

MADISON, WI.  February 04, 2010 (REPORT 5)                       

NONFAT DRY MILK - WEST                                           

Prices continue to trend lower for low/medium heat NDM.  The market 
undertone remains weak.  Pricing levels are moving lower for spot 
offerings and for various indices.  Buyers are reluctant to make 
purchases and they are seeking the best deal.  Sales are occurring, 
especially at the lower pricing levels.  Sellers and buyers are trying 
to determine where the prices will begin to level off, with no clear 
answers with many questions on domestic and international supply and 
demand issues.  Current international demand is slow for U.S. NDM.  
Drying schedules are heavy and increasing seasonally where milk intakes 
are higher.  Stocks remain moderate to heavy.  High heat prices are 
lower and the market tone weak in a lightly tested market.  The 
available offerings are meeting price resistance as buyers look for 
bargains before buying.  Stocks are generally tight but available to 
meet current needs.  U.S. NDM production in December 2009 totaled 126.4 
million pounds, 18.6% lower than last year.  NDM production in the 
Western region in December totaled 96.3 million pounds, down 18.6% from 
last year.  The West produced 76% of the U.S. total in December 2009.  
U.S. manufacturers' stocks of NDM at the end of December were reported 
at 130.8 million pounds, 34.0% lower than a year earlier but 15.1% 
higher than November.  U.S. skim milk powders (SMP) production in 
December 2009 totaled 20.7 million pounds, 16.4% more than last year.  

F.O.B. WEST:  Includes EXTRA GRADE and GRADE A                   
LOW/MEDIUM HEAT:    1.0500 - 1.2350   MOSTLY:   1.0700 - 1.1500  
HIGH HEAT:          1.1600 - 1.3900                              


1100CT butch.speth@ams.usda.gov 608.250.3202