MD_DA650                                                                        
DA                                                                              
MD DA650 Nonfat Dry Milk - Central and East                                     

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

NONFAT DRY MILK - CENTRAL AND EAST                                              
 
CENTRAL:  Prices for Central nonfat dry milk are lower on a weaker market.  
Production is gradually increasing, and some plants are focusing on high heat 
NDM for both contract and spot market interest.  Most market participants 
indicate buyers appear hesitant to make sizeable purchasing decisions and buying 
patterns seem to be shifting toward smaller quantities.  Some end users are 
making the switch away from condensed skim use into nonfat dry milk use as 
currently NDM use is economically favorable.  Manufacturers' NDM inventories are 
building seasonally.  A few buyers report successfully reworking some basis plus 
contracts into fixed price contracts for the near term.  According to NASS, NDM 
production in the Central region totaled 13.0 million pounds during December 
2009, 50.9% more than one month ago but 27.4% less than one year ago.  The 
January Dairy Market News average of the mostly price series for Central nonfat 
dry milk, low/medium heat, was $1.3664 compared to $1.3657 in December 2009 and 
.8504 in January 2009.
EAST:  Eastern nonfat dry milk prices fell in both the range and mostly series.  
Markets reflect increased weakness related to the magnitude of NDM price 
declines in the West last week.  Spot market sales were few and far between.  
Some NDM from California was purchased in the East this week, motivated by the 
decline in Western NDM prices last week relative to prevailing Eastern prices.  
Other potential buyers in the East, well aware of trends, tend to be sitting out 
transactions as long as they are covered for inventory.  Drying is mixed 
throughout the region.  In the New England and Middle Atlantic areas, there has 
been slightly reduced drying due to higher Class I demand related to milk 
supplies.  There has also been some specialty drying for internal use.  In the 
Southeast, there are pockets of increased drying; not for orders or immediate 
sale, but to handle unusual intake patterns and volumes resulting from severe 
storms, plant closings and transportation delays during the last week.   
Atlantic Region NDM production in December 2009 according to NASS, was 17.2 
million pounds, 96.8% above November but 10.2% below December, 2008.  The region 
manufactured 13.6% of the nation's NDM during December, 2009.
DAIRY PRODUCTS:  NASS's Dairy Products report shows production of human food 
NONFAT DRY MILK during December 2009 totaled 126.4 million pounds, up 25.0% from 
November 2009 production but 18.6% lower than December 2008.  Cumulative 2009 
nonfat dry milk powder production totals 1,488.3 million pounds, compared to 
1,519.2 million pounds in 2008, a 2% decrease in production.  Manufacturers' 
month ending stocks, at 130.8 million pounds, are 15.1% more than one month ago 
but 34.0% less than one year ago.  Production of SKIM MILK POWDERS, which 
includes protein standardized and blended product, totaled 20.7 million pounds, 
9.4% higher than one month ago and 16.4% higher than production one year ago.                                                                               

F.O.B. CENTRAL/EAST:  Includes EXTRA GRADE and GRADE A                          
LOW/MEDIUM HEAT:  1.1200 - 1.3750         MOSTLY:  1.2200 - 1.3000              
HIGH HEAT:        1.2500 - 1.4000                                               

11:00 eric.graf@ams.usda.gov & janet.linder@ams.usda.gov