MD_DA650                                                                        
DA                                                                              
MD DA650 Nonfat Dry Milk - Central and East                                     

MADISON, WI.  February 09, 2012 (REPORT 6)                                      

NONFAT DRY MILK - CENTRAL AND EAST                                              
                                                                                
CENTRAL:  Central nonfat dry milk prices are unchanged to lower on a weak 
market.  Spot load interest is flat according to many in the industry.  
Buyers are aware of the seasonally building NDM inventories at Central 
production locations, as well as the weaker tone to the domestic and 
international markets.  With these things in mind, some buyers are 
delaying purchasing decisions from week to week.  If end user plants are 
not in immediate need of NDM, buyers anticipate time may be on their side 
for getting lower prices than those currently available.  Nonfat dry milk 
production is at near capacity at several Central plants as farm milk 
intakes increase seasonally.  For some plants, the decision to make and 
use condensed skim internally is helping clear the steadily increasing 
intakes through pathways other than the dryers.  Production is mostly 
focusing on low heat NDM as the most effective means for clearing 
intakes.  High heat NDM interests are being fulfilled through stocks on 
hand.  
EAST: Prices for nonfat dry milk were mixed this week in light trading.  
The full price range was extended as the low end of the range moved lower 
on spot sales, while the high end of the range moved higher as NASS based 
contracts moved higher.  High heat NDM prices moved lower.  Mild winter 
weather, prompting increased milk production, continues to be the primary 
factor driving nonfat dry milk production to higher levels.  Balancing 
plants are focusing on low heat NDM production in order to clear the 
heavy milk volumes coming into the plants.  Some high heat NDM is being 
produced when milk volumes allow, usually at mid-week.  Current 
production quickly exceeds demand, causing inventories to build.  
Numerous manufacturers want to reduce inventories and are offering loads 
under contract prices.  Domestic demand remains sluggish as most buyers 
and end users are standing on the sidelines, holding off major purchases 
looking for the market to move lower.  

F.O.B. CENTRAL/EAST:  Includes EXTRA GRADE and GRADE A                          
LOW/MEDIUM HEAT:  1.3000 - 1.4800         MOSTLY:  1.3500 - 1.4350              
HIGH HEAT:        1.4600 - 1.5250                                               

1100C rick.whipp@ams.usda.gov & Robert.Hunter@ams.usda.gov