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USDA's Commodity Credit Corporation Offers to Sell Back Nonfat Dry Milk The U.S. Department of Agriculture's (USDA) Commodity Credit Corporation (CCC) recently issued a notice to the dairy industry that it is ready to sell some of its 1.2 billion pound surplus of nonfat dry milk (NFDM), which was originally purchased under the Dairy Price Support Program (DPSP). This CCC notice was issued in response to inquiries from NFDM manufacturers about whether stocks of surplus NFDM would be available, if necessary, to meet anticipated demands of the commercial market.The surplus NFDM for sale is U.S. Extra Grade, spray process. The price will depend on whether it is ordered in the eastern or western United States, as it will be the higher of the Low/Medium Heat 'mostly' price in the region where the order is tendered or the support purchase price (currently $0.9000/lb for non-fortified). According to the CCC, current market conditions favor making NFDM available to the industry because "prices have increased and offers of NFDM to CCC have declined." USDA's National Agriculture Statistics Service (NASS) reported the average price of NFDM rose 1.15 cents per pound (1.27%) between the week ending July 6 to the week ending October 5. Comparing the average sales to CCC for the three weeks at the beginning and end of that period show, sales are down 77%. One year ago, sales dropped to zero for the last three weeks of September 2001. However, there was no interest expressed then in buying NFDM to supply market needs. The CCC started building its NFDM stocks in 1997, but did not begin purchasing large quantities on a nearly weekly basis until 2000. Since January 2000, an average of 7.3 million pounds of NFDM per week has been purchased under the DPSP. If reconstituted, the current CCC inventory of NFDM represents 164% of the estimated annual U.S. sales of fluid skim milk. Click here for a copy of the official USDA announcement. For complete details, such as the specific terms and conditions for CCC sell-back transactions, and the Solicitation Mailing List Application, members should contact IDFA's economic policy group at 202/737-4332. Posted October 15, 2002
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