Market News

Dairy prices trending lower

No trading at the Chicago Mercantile Exchange dairy markets on Friday. For the holiday-shortened week: cash cheese barrels gained 4.75 cents, blocks increased a penny, butter is a half-cent higher and nonfat dry milk slipped a half-cent.  Class III futures for November unchanged, December lost 19 cents, January is 41 cents lower, February is down 30 cents and May slipped 3 cents.

 

The national weighted average advertised price for a half-gallon of organic milk was $3.95 during Thanksgiving week while a half-gallon of conventional milk was $2.42. That put the organic-to-conventional spread at $1.53 down from $2.16 the previous week.

The October Consumer Price Index for all food was up 1.6 percent compared to October of 2014. The Dairy Index was down 3 percent with butter down 2.3 percent from a year ago, cheese was 3 percent lower and fresh whole milk is 8.5 percent lower.

 

Around the globe; milk production is steady to slightly higher in Europe with weak prices for skim milk powder, whole milk powder and whey. Australian milk production is slowing as dry conditions are getting worse and irrigation water prices are high.  Some expect the 1-to-2 percent growth predicted for Australian milk production this year will be revised downward.  New Zealand production is also trending lower.

 

Canadian dairy interests are expressing some concern over the Trans Pacific Partnership trade deal. When the agreement was announced in October, Canadian dairy producers were told imports would increase 3.25 percent over five years.  The Harper Government promised it would put up $4.3 billion over five years to compensate farmers for losses incurred by the deal.

The Harper Government lost the election in early November with the Liberals let by Justin Trudeau gaining a majority of seats in Parliament.

The new Liberal Government which was not involved in the negotiations is reviewing the agreement as promised in the campaign. New International Trade Minister Chrystia Freeland says the new government is not bound by commitments made by the conservatives and that the compensation package is not a “done deal”.

Dairy Farmers of Canada spokeswoman Isabelle Bouchard says the Trudeau government told her group they will be consulted when they are read to review the compensation package.