MD_DA640                                                         
DA                                                               
MD DA640 Nonfat Dry Milk - West                                  

MADISON, WI.  July 09, 2009 (REPORT 27)                          

NONFAT DRY MILK - WEST                                           

Prices for low/medium heat NDM in the west are mostly unchanged 
for the range and mostly series.  However, the market tone is 
weaker.  Market trading has slowed and several manufacturers are 
beginning to adjust prices lower and/or discounting index pricing. 
 Sales activity has slowed as buyers shave purchases.  Movement 
into cheese plants remains slow.  Export shipments will trend 
higher in coming weeks as DEIP orders are filled, but the timing 
of the shipments is long and not expected to impact the market.  
Western NDM sales to the CCC support program are expected to 
remain heavy and utilized to balance stocks.  Heavy CCC offerings 
will also impact several indexes pricing levels.  Offerings of 
swap powder continue to be shown.  High heat prices are mixed and 
the market is fairly balanced.  Product is available to fill 
current orders.  Production levels are variable depending on 
drying availability which has increased following the holiday 
weekend.  For the week of June 29 - July 3, Western producers 
cleared 8.4 million pounds of NDM into the CCC product price 
support program.  On July 6, USDA announced initial 2009-10 DEIP 
allocations for the period of July 1, 2009, through June 30, 2010. 
 The 2008-2009 NDM allocations that remain uncommitted are 48,176 
MT; this balance will be made available through the issuance of 
new Invitation for Offers.  U.S. NDM production in May 2009 
totaled 149.1 million pounds, 13.3% higher than last year.  NDM 
production in the Western region in May totaled 104.9 million 
pounds, up 23.3% from last year.  The West produced 70% of the 
U.S. total in May 2009.  U.S. manufacturers' stocks of NDM at the 
end of May were reported at 189.2 million pounds, 43.7% more than 
a year earlier and up 8.1% from the prior month.  Skim milk 
powders (SMP) production in May 2009 totaled 26.7 million pounds, 
41.3% less than last year.  

F.O.B. WEST:  Includes EXTRA GRADE and GRADE A                   
LOW/MEDIUM HEAT:    .8000 - .8800   MOSTLY:   .8000 - .8600      
HIGH HEAT:          .8700 - 1.0075           

1100CT Butch.Speth@ams.usda.gov 608.250.3202