MADISON, WI. August 27, 2009 (REPORT 34)
NONFAT DRY MILK - CENTRAL AND EAST
CENTRAL: Prices for Central nonfat dry milk are mostly higher and the market
tone is firmer. Intakes at several Central locations are lower this week as
farm milk production tapers off seasonally. Interest in condensed skim is
steady, but availability is constrained due to increasing bottled milk demand
for refilling the school pipeline. Those issues are curtailing production of
nonfat dry milk at most Central balancing plant locations. Current production
of low/medium heat NDM at plants that are drying is often earmarked for helping
rebuild inventories. Nonfat dry milk inventories are mostly sufficient to meet
near term customer needs so plants are focusing on powder needs for the balance
of the year. Manufacturer offers to the spot market are uneven and often priced
to favor inventory enhancement.
EAST: Eastern nonfat dry milk production has slowed due to decreased milk
supplies caused by declines in milk production and increased Class I demand.
Some plants have shuttered their dryers to assist with fluid demand, allowing
them to perform extended maintenance. Drying activity is focused on filling
current contract obligations and managing weekend deliveries. Spot market
activity remains light with closely held inventories awaiting further market
F.O.B. CENTRAL/EAST: Includes EXTRA GRADE and GRADE A
LOW/MEDIUM HEAT: .9500 - 1.0725 MOSTLY: .9500 - .9900
HIGH HEAT: .9600 - 1.1725
Here is the nagging question: If NFDM is selling in parts of the country for as much as $.99/ pound, and it is a cheap product to truck, why sell the stuff to the government?