Production of NDM / SMP plunged this summer following the reduction in milk supplies in the Western states. NDM/SMP output in August was 116.3 million lbs., down 18.0% from a year earlier, and the smallest figure since September 2007.

Whey futures covering the first half of 2010 have increased 9.3 cents to an average of 37.5 cents. The USDA Dairy Market News describes the supplies of whey as adequate, with prices increasing due to the influence of stronger milk powder prices and increased international whey prices. As dry whey from Europe is trading in an area of 8 to 14 cents higher than a month ago making it 40 to 50 cents a lb.

The struggling U.S. dairy industry must be restructured to avoid cycles of boom and bust, Agriculture Secretary Tom Vilsack stated, less than a week after Congress announced a $350 million dairy bailout.

Nonfat dry milk prices climbed steadily for the week ending October 2nd as supplies remain tight, Review the week at a glance.

Lawmakers from dairy-producing states announced an agreement on $350 million in aid for struggling milk farmers. Some $290 million would go for direct support of dairy farmers under a program to be devised by the Agriculture Department, according to Rep. David Obey and Sen. Herb Kohl, both Wisconsin Democrats. An additional $60 million would cover purchases of surplus cheese and other dairy products in hopes of raising prices. Food banks and other nutrition programs would get the goods.