Market News

Butter slides, cheese increases

Butter slid another 15 cents on the Chicago Mercantile Exchange on Monday while cheese and nonfat dry milk pushed higher. Barrels increased 11.25 cents on 6 sales, blocks added 5.25 cents on one unfilled bid and nonfat dry milk added 4 cents from 9 sales. Class III futures move higher as well with October up 21 cents, November gained 22 cents and December adding 21 cents. The April-through-December 2016 contracts are all above $16.

Cooperatives Working Together (CWT) has accepted 18 requests for export assistance from Dairy Farmers of America, Maryland & Virginia Milk Producers Cooperative, Michigan Milk Producers Association, Northwest Dairy Association (Darigold) and Tillamook County Creamery Association who have contracts to sell 465,175 pounds of Cheddar and Gouda cheese,  6.515 million pounds of butter and 1.041 million pounds (472 metric tons) of whole milk powder to customers in Asia, Europe, the Middle East, North Africa and South America. The product has been contracted for delivery in the period from October 2015 through March 2016.

Year-to-date, CWT has assisted member cooperatives who have contracts to sell 47.145 million pounds of cheese, 25.671 million pounds of butter and 35.556 million pounds of whole milk powder to thirty-five countries on six continents.

 

 

It appears there is minimal movement in dairy policy in the Trans Pacific Partnership trade deal announced Monday. Dairy was one of the main sticking points in the negotiations as the U.S. wanted more access to the Canadian market before granting New Zealand more access to the U.S. market.

The Canadian government says the deal will allow dairy imports up to 3.25 percent of total supply annually. Ottawa will spend $4.3 billion over the next 15 years to compensate Canadian farmers impacted by the TPP. The deal leaves Canada’s dairy quota system intact.  Dairy Farmers of Canada president Wally Smith says the agreement is good news for Canadian dairy producers.

New Zealand dairy cooperative Fonterra expressed disappointment with the dairy the agreement. New Zealand had hoped to eliminate all tariffs on dairy exports but negotiators were unable to get that. Fonterra chair John Wilson says while the deal failed to reach its potential, it is a small but significant step forward for the sector. NZ Trade Minister Tim Groser says the deal will eventually lead to elimination of tariffs on cheese exported to Japan and one part of cheese tariffs to the U.S.

The U.S. dairy industry is withholding judgement at this point. In a joint statement, the National Milk Producers Federation and U.S. Dairy Export Council said they will “carefully review the agreement’s dairy provisions in the coming days” and then make a statement.