DRY DAIRY PRODUCTS - MAY 12
NDM - CENTRAL: In the Central region, low/medium heat nonfat dry milk prices are mostly higher. Prices on some auction sites moved incrementally higher while other indices used for variable contract pricing shifted lower. Contracted loads are clearing on time, with price structures intact. Manufacturers report that spot interest is price sensitive. Resellers, too, note their buyers limit interest to offers carrying a discount to the current market. Buyers/end users view the current production trends as lending a bearish tone to the marketplace. Manufacturers indicate low/medium heat NDM production is ongoing and at peak output at most regional plants. Some milk intake volumes are clearing the separators, but after that, cream is moving on to further processing while some of the nonfat solids are shipping out for disposal. Low/medium heat NDM inventories are building in the Central region. Central high heat NDM prices are steady. With intermittent production at many facilities, high heat NDM inventories are manageable to tight. Many sales are contract based.
NDM - EAST: Prices for low/medium NDM increased this week. Sources note that most manufacturers are firm on prices, as they feel confident in their position. Some market participants noted pressure to lock up bids as NDM prices moved unexpectedly higher. With heavy milk intakes, low/ medium NDM production volumes remain high. Reports indicate that condensed skim loads are available at a discount to Class II manufacturing. In addition, there are signs that excess condensed skim loads are continuing to be discarded. East high heat nonfat dry milk price are steady. Production is intermittent, as inventories are adequate to tight. Most sales remain contract based, as near-term commitment are being met.
NDM - WEST: Low/medium heat NDM prices moved higher. The market undertone is mixed. Sales outside contracts are active this week. Some industry participants are puzzled by the recent price strength at the CME, as supplies are readily available in the market. However, according to some processors, NDM supplies are tight and the market is getting stronger. Some buyers are optimistic about future prices, while others are hesitant to make any purchase at this point. Low/medium heat nonfat dry milk production is active as moderate to heavy condensed skim volumes continue clearing into dryers. High heat nonfat dry milk prices are slightly higher. Sales outside contracts are light. Production is steady to lower as many processors are focused on low/medium heat NDM production. As a result, inventories are tight in the f.o.b. spot market. Western production of human food nonfat dry milk during March totaled 108.3 million pounds, 12.3% lower than a year ago, but 21.7% above the previous month.
