MD_DA770                                                              
DA                                                                    
MD DA770 Lactose - Central and West                                   

MADISON, WI.  November 19, 2009 (REPORT 46)                           

LACTOSE - CENTRAL AND WEST                                            
                                                                      
Lactose prices are fractionally higher on the bottom of the mostly 
price series on a firm market.  Spot sale offerings from 
manufacturers are infrequent.  Most manufacturers' holdings are 
described as adequate to short of current demand.  A few producers 
are holding back on possible spot sale loads in hopes of capturing 
higher prices in the next few weeks.  A few resale loads for the 
domestic market reportedly garnered prices 3-4 cents above the 
high side of the range.  Lighter demand from confectioners allowed 
one or two producers to close the gap between weekly orders to be 
shipped and available lactose loads.  There is some expectation 
that the seasonal business nature of some lactose end users will 
give producers a breather and allow some catching up on order 
fulfillment.  December contract negotiations are mostly complete. 
A few annual and first quarter lactose contract offers have been 
mailed out as a preamble to negotiations.  Indexed pricing has 
reportedly replaced fixed pricing in most contract offers and many 
producers are offering 2010 production to established customers 
before newcomers.  This is making it more difficult for buyers to 
"shop around" before committing to a contract.  Buyers are also 
aware that delaying too long before contracting could mean 2010 
lactose purchasing might have to rely heavily on the spot market. 

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       

1100C  janet.linder@ams.usda.gov  (608)250-3207