Prices are up around 25¢ from a year ago (an increase of about 70 per cent), but little buyer resistance is evident.

However, “export markets continue to be priced lower to maintain market share as international prices are below current domestic levels,” says USDA’s Dairy Market News.

Negotiations for 2012 allocations continue. The whey stream continues to move to higher-protein products.

In the first three quarters of the year, dry whey production was down 9.4 per cent from 2007, according to USDA’s latest “Dairy Products” report (see chart).

In addition, output of WPC 20-50 per cent was down 8.2 per cent from four years earlier.

Meanwhile, production of WPC 50-90 per cent was up 40.6 per cent and production of whey protein isolate (WPI) was up 53.2 per cent.

This year, 49 per cent of the whey stream has gone into higher-protein whey products (with at least 50 per cent protein), compared with a 38 per cent share in 2007.

The WPC market has steadied the last few weeks at prices eight to 10 per cent below the summer peak, pulled down by weaker NDM prices. The lactose market remains firm, with prices topping 75¢ for the first time in four years.

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