As printed in our August 10, 2015 issue...
DAIRY REMAINED A "HOT BUTTON ISSUE" as Trans Pacific Partnership (TPP) negotiations entered the final stages. The potential free trade zone between the U.S., Canada, Japan, New Zealand and eight additional Pacific Rim countries continued to be held up by Canada and Japan's agricultural tariffs and other protectionist measures.
TWO LETTERS FROM THE U.S. CONGRESS were delivered to Canadian trade negotiators detailing America's dairy-related concerns. One letter was signed by 21 House members, while 22 Senators (about one in five) signed a similar letter, asking for greater U.S. dairy market access to Canada. Some tariffs are as high as 300 percent.
CANADA'S NEGOTIATORS said they wouldn't debate the matter through the media and would bring their proposal to the next round of TPP talks due soon. Supply management provisions have garnered support from Canada's elected officials for decades. For more, turn to page 498.
STRONG WORLDWIDE PRODUCT INVENTORIES sent butter, Cheddar and skim milk powder prices to the lowest levels since the 2008 founding of New Zealand's Global Dairy Trade (GDT). Overall, the weighted index for eight dairy products fell 10.7 percent during biweekly trading.
U.S. EXPORTS HAVE BEEN SPUTTERING, as well. Through May, butter has been off 74 percent; dry whey, down 22 percent; and cheese, off 10 percent. Nonfat dry milk exports were up 1 percent. Overall, U.S. dairy exports represented 14.5 percent of production; imports, 3.6 percent.
CHEESE INVENTORIES GREW 2.6 percent in June when compared to a month earlier, up 8.1 percent over last year. While monthly butter stocks fell 3.8 percent, levels were 28 percent higher than last year.
MILK PRODUCTION SLOWED to its lowest growth this year with output up just 0.7 percent. Four Western dairy states reduced milk flow: California (-4.3 percent), Texas (-2.1), New Mexico (-4.5) and Washington (-0.4).
DAIRY COW CULLING CLIMBED 6 percent in July compared to a year earlier. Through June, cows sent to packing plants had been up 4.7 percent.
ON JULY 1, HEIFER INVENTORIES stood at 4.2 million (500 pounds or larger) or 45.2 heifers per 100 cows. That ratio was up from 2014's 44.3.
THE 2016 ALL-MILK PRICE FORECAST was reduced to a $17.50 midpoint by USDA. That prediction was down 45 cents over the past 60 days.
BRIEFLY: California's 4b (whey) price formula was raised temporarily by the state's department of ag. Beginning in August, prices would be closer to federal order Class III prices. Just 12 counties produced 25 percent of the nation's milk, reported Central federal order administrators. Over 56 counties, produced half the milk; 180 netted 75 percent.