MD_DA650                                                                        
DA                                                                              
MD DA650 Nonfat Dry Milk - Central and East                                     

MADISON, WI.  May 16, 2013 (REPORT 20)                                          

NONFAT DRY MILK - CENTRAL AND EAST                                              
                                                                                
CENTRAL:  Central nonfat dry milk prices are 1 cent lower on the top of 
the range and on each end of the mostly.  Market participants note 
interest from buyers is light and price sensitive.  They speculate some 
large volume end users prefilled demand for Q2 - Q3, which is a typical 
buying pattern.  Interest from some small volume end users, though, has 
been inconsistent with past buying practices.  This is leading some 
brokers/traders to think that business for these end users may be slower 
and yielding less need for NDM in the near term.  Nonfat dry milk 
production is steady to lower in the region.  Farm milk intakes are 
uneven, with some areas noting a recent surge in intakes while other 
areas are shuffling milk loads around to accommodate lower milk intake 
volumes.  Some pushback from fluid accounts is also changing the volumes 
moving into Class IV production.  Sales of condensed skim into Class II 
are strong.  Nonfat dry milk inventories are variable.  A few 
manufacturers indicate recent sales drives have resulted in light NDM 
inventories and they are content to rebuild low heat and high heat 
inventories as milk supplies allow.  
EAST:  Price ranges for low heat nonfat dry milk declined this week as 
sales based on various price indices moved lower.  High heat nonfat dry 
milk prices moved higher, supported by spot sale activity.  Production of 
nonfat dry milk is active, as the combination of seasonal milk production 
increases and lackluster demand for condensed skim by ice cream 
manufacturers, are maintaining heavy manufacturing milk volumes going to 
dryers.  Most manufacturers are focused on low heat NDM production in 
order to more readily clear increased volumes.  High heat production is 
limited with supplies becoming fairly tight.  Spot sale market activity 
has slowed as some buyers have recently made purchases and increased 
inventories.  Lower priced whey protein concentrate 34, which is used as 
an alternative product, is also contributing to NDM buyer hesitancy.  
Export demand has weakened as SMP pricing on the g/DT auction has 
declined.  Many buyers have a "wait and see" attitude, wanting a clearer 
picture of the market prior to making additional purchases.  The various 
contradicting market factors have given the market a weak undertone.  

F.O.B. CENTRAL/EAST:  Includes EXTRA GRADE and GRADE A                          
LOW/MEDIUM HEAT:  1.6800 - 1.7400         MOSTLY:  1.6900 - 1.7300              
HIGH HEAT:        1.7250 - 1.8000                                               

1100C janet.linder@ams.usda.gov & rick.whipp@ams.usda.gov