MD_DA770                                                              
DA                                                                    
MD DA770 Lactose - Central and West                                   

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

LACTOSE - CENTRAL AND WEST                                            
                                                                      
Prices are unchanged for the week on both lactose price series.  Lactose 
production is apt to be a little stronger in some Central locations as pushbacks 
on bottled milk orders will lead to heavier cheese production toward the end of 
the week.  Some Western producers note lower regional milk production is 
decreasing milk intakes at some cheese plants, and therefore, lowering the whey 
solids available for lactose production.  Lactose demand is steady.  Some 
manufacturers are expressing concerns about lactose prices continuing to 
strengthen over the near term, which could lead to end users reformulating and 
removing or reducing lactose in their products.  Lactose inventories are mostly 
snug and a few manufacturers have curtailed monthly contracting activities so 
that December production can be used to catch up on contract fulfillment.  
Foreign Agricultural Service reports that September lactose exports under 
Schedule B code 1702110000, anhydrous, >99% solids, totaled 10.8 kilotons (kt). 
This is a decrease in exports of 14.3% compared to August 2009 but a 72% 
increase from September 2008 export quantities.  Cumulative 2009 exports through 
September total 92.1 kt, a 29.3% increase from the same time span in 2008.  
China (25.4 kt), Japan (12.5 kt) and Mexico (10.2 kt) are the top three 
destinations for lactose exports thus far in 2009, accounting for 52% of lactose 
exports.  

NOTE:  Due to evolving market conditions and requests from the 
domestic lactose industry, the Lactose - Central and West price 
series will be modified to include spot sale and up to three month 
contract F.O.B. prices for edible, non pharmaceutical lactose, 
starting with the report (#1) to be released on January 7, 2010.  
The last report (#52) containing pricing information for mesh 
sizes 30 - 100 will be released on December 31, 2009.  Questions 
and comments can be directed to:  DonaldO.Nelson@ams.usda.gov or 
Janet.Linder@ams.usda.gov, 608-250-3200.
                                                                      
Including spot sales and up to 3 month contracts.  Mesh size 30 - 100.
F.O.B. EDIBLE:         .2250 - .4000    MOSTLY:   .3050 - .3700       

200C  janet.linder@ams.usda.gov  (608)250-3207