As printed in our July 2018 issue . . .
DAIRY FUTURE PRICES RECEDED amid concerns over a looming trade war that dragged down the market. On May 1, July to December Class III future contracts averaged $16.40. By late June, those same contracts slipped by 65 cents to a $15.75 per cwt. average on the CME.
USDA REMAINED BULLISH on its price projections for 2018 by raising its midpoint for an All-Milk price to $16.80 per cwt., up 35 cents from one month earlier. Its 2019 forecast climbed 50 cents to $17.20.
AS THE U.S. EXPORTED RECORD LEVELS of milk this April, Mexico and China slapped tariffs on inbound U.S. dairy products. Those import taxes were in direct response to President Trump’s tariffs on a host of products bound for America from those trading partners.
MEXICO AND CHINA ACCOUNT FOR ONE-THIRD of U.S. dairy export volume. Mexico intends to slap a 20 percent tariff on European-style cheeses such as Gouda and Parmesan beginning July 5.
NONFAT DRY MILK AND WHOLE MILK POWDER could face 25 percent tariffs in China. It’s also expected that the Asian nation will add additional inspections and further slow the flow of U.S. dairy products.
SPECULATION SUGGESTED MEXICO and other dairy trading partners may have been “buying up” product in preparation for the trade battle. Rabobank projected Mexico has six months of cheese in storage. In March, the U.S. had exported 17.3 percent of its milk volume, April 18.8 percent.
USDA SENT DAIRY FARMERS A THIRD LIFELINE by extending the sign-up for 2018 Margin Protection Program for Dairy (MPP-Dairy) to June 22. Originally, deadlines had been June 1 and June 8. At last count, more than 21,000 dairy farmers — 52 percent of the nation’s total — has signed up for USDA’s signature revenue protection program.
MAY MILK PRODUCTION GREW 0.8 percent nationally. Among the top 23 dairy states . . . 12 expanded milk flow, nine contracted, and two held steady. California rose 0.5 percent, while Wisconsin was up 1.1. percent. Colorado led all gainers, up 11.6 percent. Virginia was off 5.8 percent.
CALIFORNIA’S NEW FEDERAL ORDER will be led by Cary Hunter at the onset, and it will officially price milk for the first time in the Golden State on October 17. More information can be found at www.cafmmo.com.
BY 2030, GLOBAL MILK PRODUCTION could climb 35 percent, or three times current U.S. production, predicted IFCN researchers. That would be driven by 23 percent more milk per cow and 54 percent more milk per farm. Milk consumption could grow from 256 to 298 pounds per person.
COOPERATIVES WORKING TOGETHER (CWT) has been extended through 2021. The 4-cent-per-cwt. contribution assists with dairy exports.
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