December 8, 2017 CapitalPress.com Dairy/Livestock Subscribe to our weekly dairy or livestock email newsletter at CapitalPress.com/newsletters China’s new tariff reduction to boost U.S. cheese exports By CAROL RYAN DUMAS Capital Press China is unilaterally low- ering its tariffs on cheese imports from 12 percent to 8 percent in a broader pack- age of tariff reductions on foods and consumer goods that went into effect on Dec. 1. The U.S. Dairy Export Council says the lower tar- iffs will immediately boost the competitiveness of U.S. cheese exports and help U.S. suppliers play a larg- er role in meeting China’s booming cheese demand. “We are very pleased with China’s decision because it will help U.S. cheese export- ers and manufacturers chip away the tariff disadvantage with other competitors,” Tom Vilsack, USDEC presi- dent and chief executive of- ficer, said in a press release. Cheese was includ- ed in the tariff reductions because of three years of bridge-building efforts led by USDEC. Those efforts fo- cus on working with Chinese authorities to analyze the mutual benefits that would flow from China unilaterally lowering its tariffs on certain dairy products. USDEC has been focused on pursuing opportunities to address the competitive disadvantage faced by var- ious U.S. dairy exports into China and other markets, said Shawna Morris, vice president of trade policy for USDEC. The effort is broader than access to the cheese market in China, but this was an op- portunity to make headway there and USDEC is very pleased by the step China Dairy Markets Associate Press File Cheese ages at a Wisconsin plant. China’s decision to reduce its tariff on U.S. cheese is expected to increase exports. chose to take, she told Cap- ital Press. “As this was a unilateral action, China clearly saw it as in its own benefit to make this change and thereby help to increase consumer choice options in China,” she said. Over the last decade, Chi- na’s cheese imports soared more than seven-fold to near- ly 100,000 metric tons. Al- ready a Top 10 cheese buyer, it is on pace to become the largest cheese importer in the world in the coming years. At the same time, U.S. suppliers have been losing market share, in part due to unfavorable tariff rates ver- sus that of competitors, ac- cording to USDEC. 17 U.S. cheese exports to China in 2016 were 11,743 metric tons, valued at $38.2 million. That was down from 15,483 metric tons valued at $53.3 million in 2015, ac- cording to the USDA Foreign Agricultural Service. U.S. market share on a value basis was 14 percent of China’s total cheese imports in 2016, down from the peak of 27 percent in 2012, Ve- ronica Nigh, American Farm Bureau Federation econo- mist, noted in this week’s AFBF Market Intel. Oceania and the EU are the main competitors to U.S. dairy in China, Morris said. The EU doesn’t have a free trade agreement with China, so it pays the same tariff rates as the U.S. But Australia and New Zealand have agreements with China that provide duty-free access on a certain quantity of their products and diminishing tariffs for various products, she said. The U.S. remains at a dis- advantage not only in China but in other countries when it comes to tariffs due to lack of U.S. free trade agreements, Jaime Castaneda, USDEC senior vice president of trade policy said in the press re- lease. “We are committed to finding ways to recoup that competitive disadvantage,” he said. USDA expands school flavored-milk options By CAROL RYAN DUMAS Capital Press Low-fat flavored milk will be back in schools around the country next school year due to USDA’s new School Meal Flexibility Rule, which rein- states that option. USDA eliminated that op- tion in 2012, allowing only nonfat flavored milk and low- fat and nonfat unflavored milk in the National School Lunch and School Breakfast pro- grams. Dairy groups are applauding USDA Secretary Sonny Purdue for following through on his proposal earlier this year to al- low schools the option, saying loss of that option resulted in a significant decrease in milk consumption in schools. While total fluid milk con- sumption in schools in 2016 was estimated at 402 million gallons or 3.4 billion pounds, based on USDA data, it had dropped by 288 million half pints in 2015 compared to 2011, according to Internation- al Dairy Foods Association and National Milk Producers Fed- eration. That represents a 4.2 percent decrease of about 144 million pounds, or nearly 17 million gallons, despite growing enroll- ment and the option of nonfat flavored milk. USDA’s action “will help reverse declining milk con- sumption by allowing schools to provide kids with access to a variety of milk options, in- cluding the flavored milks they enjoy,” Michael Dykes, IDFA president and CEO, said in a press release. Perdue’s willingness to provide greater flexibility to schools recognizes that a vari- ety of milk and other healthful dairy foods is critically import- ant to improving nutritional contributions of child nutri- tion programs in schools, Jim Mulhern, NMPF president and CEO, said in the press release. “The math here is quite simple: More milk consump- tion equals better nutrition for America’s kids,” he said. Having a small amount of fat in the milk helps with mouth-feel as well as satiety, Chris Galen, NMPF senior vice president of communications, told Capital Press. “The issue isn’t just fla- vored milk; schools are of- fering that now. It’s the com- bination of the flavor, usually chocolate, plus the 1 percent fat level that makes it more popular than either fat-free flavored, or 1 percent white milk,” he said. The other thing to keep in mind is that offering 1 percent flavored milk is consistent with the Dietary Guidelines for America, which recognize that such a product will help chil- dren meet their daily nutritional needs without making signifi- cant contributions to their sugar or fat intake levels, he said. Under current rules, schools would have to demon- strate either a reduction in stu- dent milk consumption or an increase in school milk waste to offer low-fat flavored milk. The two organizations said they appreciate Perdue’s un- derstanding that the regula- tory process needed to move quickly so schools can in- clude the option in their menu planning and procurement processes. Publication of the new rule will allow school districts to solicit bids for low-fat fla- vored milk this spring, giving milk processors time to for- mulate and produce a product that meets the specifications of particular school districts, they said. Columbia-Snake River Irrigators Association Lee Mielke Dairy prices continue lower By LEE MIELKE For the Capital Press C ME dairy prices were mostly lower last week. Cheddar block cheese fell to $1.55 per pound the first day of trading following the Thanksgiving break, but closed Friday at $1.5625, down 4 3/4-cents on the week and 24 3/4-cents below a year ago. The barrels fell to $1.51 last Wednesday and fin- ished Friday at $1.5350, down 14 cents on the week and 8 cents below a year ago. Twenty-two cars of block traded hands on the week and a whopping 62 of barrel. The blocks then tum- bled 4 1/4-cents Monday and slipped three-quarters Tuesday, to $1.5125, as trad- ers analyzed the morning’s Global Dairy Trade auction and awaited the October Dairy Products report. That’s the lowest block price since Aug. 31, 2017. The barrels were up a penny and a half Monday and added 1 3/4-cents Tues- day, hitting $1.5625, 5 cents above the blocks. Milk headed to Class III plants remained acces- sible following Thanksgiv- ing weekend, reports Dairy Market News, and spot prices ranged from flat mar- ket to $4 under class. Barrel prices hovering above the blocks is typically viewed as “an indication of market instability.” Cheese output in the West is also strong due to higher milk availability. Supplies are abundant and inventories continue to increase but de- mand is doing well. The fall- ing prices have also resulted in more interest from the in- ternational market. December 5, 2017 CSRIA Open Letter Hon. Sect. of Interior Ryan Zinke Hon. Sect. of Energy Rick Perry Hon. Sect. of Defense James Mattis Hon. EPA Adm. Scott Pruitt Hon. Sect. of Ag. Sonny Perdue Lt. Gen. John Kelly, WH Chief of Staff RE: Protecting the Columbia-Snake River System, a Great National Asset Dear Cabinet Secretaries and Gen. Kelly: It would seem inconceivable that we should have to request your intervention to protect one of the greatest national assets, the economic engine that comprises the Columbia-Snake River Federal Hydropower System. But events prod this correspondence. The Federal Hydropower System is a testament to what good men and women can achieve, when guided by reason and the pursuit of economic prosperity and social well-being. The System’s non-carbon emitting turbines electrify the region’s commerce, serving some of the most influential companies in the world—like Boeing, Microsoft, Intel, Amazon, Nike, and others—and energize the homes of millions of Northwest and California citizens. The System creates an accessible water source for the most productive and efficient irrigated farms on the planet; it offers commercial navigation to ship the nation’s wheat to coastal sea ports; it provides for unique recreational opportunities. And the scientists from NOAA Fisheries and the U.S. Army Corps of Engineers have developed protective measures for salmon and steelhead that overcome harsh river system conditions in unfavorable water-years. But the political, and bureaucratic, leviathan created by the Endangered Species Act (ESA) has nurtured twenty-five years of Columbia-Snake River litigation, now being encouraged by a single, federal district court judge (Oregon). Worse yet, this judge now refuses to review evidence that points toward the destruction of about two-thirds of Idaho’s wild spring chinook run, the lethal product of inept ESA management regimes and failed oversight of the so-called fish managers. Our prayer for relief is vested in the statutory power of the ESA (ESA Committee review and the exemption process), where an executive directive can be invoked to shield Hydropower System operations from further, abusive litigation, and to adopt System measures that will more than sufficiently protect ESA-listed fish. While CSRIA is in communication with senior agency and DOJ staff, who are being respectful of our legitimate concerns, the national asset at risk is worthy of your personal attention, and we would request an opportunity to meet directly with you, to better inform your understanding of the situation. Respectfully, CSRIA Board of Directors 3030 W. Clearwater, Ste. 205-A, Kennewick, WA 99336 509-783-1623, DOlsenEcon@AOL.com 49-1/101