MD_DA650                                                                        
DA                                                                              
MD DA650 Nonfat Dry Milk - Central and East                                     

MADISON, WI.  November 24, 2009 (REPORT 47)                                     

NONFAT DRY MILK - CENTRAL AND EAST                                              

CENTRAL: Nonfat dry milk prices in the Central region are steady.  Spot load 
availability is mixed, with a few plants able to offer product intermittently.  
Other plants are advising buyers on how long it will be before spot loads of NDM 
will be available.  Low heat nonfat dry milk production is slated to be higher 
at several locations during the holiday weekend as most bottled milk orders 
should be filled before Wednesday.  High heat NDM production is infrequent and 
stocks are tight.  Lighter institutional demand is also freeing up milk intakes 
that will allow active nonfat dry milk production.  Brokers and traders indicate 
buying interest is low this week for spot loads.  Some end users may be waiting 
for a softening in NDM prices that has occurred seasonally in some years in the 
recent past.  During those periods, farm milk production and NDM production 
increase, NDM inventories build, and prices decline.  Recent information about 
an international tender for skim and whole milk powders indicates that all 
product will probably be sourced from European stocks.  Despite the recent 
rescinding of export subsidies in the EU, subsidies are reportedly valid during 
the month of awarding and four months hence.  This means some offers to the 
tender may reflect subsidized milk powder prices that are below current European 
market values.  In addition, contacts in the EU indicate that non-intervention 
stocks are currently available to fill this tender.  No information is available 
at this time on the acceptance of any offers.  Foreign Agricultural Service 
reports that September 2009 exports of nonfat dry milk under Schedule B code 
0402100000 total 19.8 kilotons (kt), about a 30% decrease compared to August 
2009, and a 32% decrease from September 2008.  Cumulative 2009 exports through 
September total 185.3 kt, a 44% decrease from the same time span in 2008.  
Mexico (78.6 kt), Philippines (18.7 kt) and Indonesia (15.2 kt) are the top 
three destinations for nonfat dry milk thus far in 2009, accounting for 61% of 
the total nonfat dry milk exports. 
EAST:  NDM manufacturers are anticipating increased holiday milk supplies will 
allow them to begin to rebuild inventories and/or catch up on contract orders.  
The general consensus is the increased production of NDM this holiday week will 
not be enough to fully catch up on contract orders. Spot market activity remains 
fairly light.  Manufacturing supplies for NDM may be limited as some plants are 
electing to hold condensed skim supplies for next week's resumption of Class II 
and III product production.  Buyers are resistant to higher prices and seem 
willing to wait for supplies to increase and affect price declines. 
                                                                                
F.O.B. CENTRAL/EAST:  Includes EXTRA GRADE and GRADE A                          
LOW/MEDIUM HEAT:  1.2000 - 1.4600         MOSTLY:  1.2000 - 1.3600              
HIGH HEAT:        1.2200 - 1.5500                                               

11:00 rick.whipp@ams.usda.gov & janet.linder@ams.usda.gov