March 30, 2018
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9
Dairy/Livestock
USDEC boosts its dairy export efforts
Growing milk production will demand
more attention to Middle East, North Africa
By CAROL RYAN DUMAS
Capital Press
As part of an ambitious
effort to increase exports, the
U.S. Dairy Export Council is
adding nine on-the-ground
professionals to its team in
key foreign markets.
The move is part of the
“Next 5%” initiative an-
nounced last fall to grow
dairy exports from 15 percent
of U.S. milk production to 20
percent over the next three to
five years.
Hiring has already begun,
beginning with two profes-
sionals in the Middle East
and North Africa, called the
“MENA” region.
USDEC sees ample op-
portunity for U.S. suppliers to
capture a greater share of that
large and growing market.
MENA’s dairy imports
grew significantly from 2007
to 2014, and despite a down-
turn the last three years, im-
ports averaged a 3 percent
annual growth over the last
decade.
Import numbers are hard
to come by, so USDEC uses
export data from major sup-
pliers as a proxy, said Al Lev-
itt, USDEC vice president of
communications and market
analysis.
Exports to the region in
2017 of skim milk and whole
milk powders, cheese, butter-
fat and whey products from
the top 11 suppliers totaled
1.513 million tons, he said.
For comparison, China’s
imports of the same prod-
ucts in 2017 were about 1.47
million tons, and Southeast
Asia’s imports were 1.54 mil-
lion tons, he said.
Total global dairy trade
is about 9.5 million tons. So
the MENA region is about 16
percent of total world dairy
trade, he said.
“Our exports to the region
have plunged since 2014. But
now we’re doubling down,
applying more resources to
try to get some of that share
back,” he said.
Oil is a big part of the
MENA economy, so when
oil prices began their descent
in the summer of 2014, dairy
import demand followed,
declining for three straight
years, USDEC reported in
January.
Cuts in oil production until
the end of 2018, announced
by OPEC in late Novem-
ber, are expected to increase
oil prices. The International
Monetary Fund has also fore-
cast growth in the GDP for
MENA’s oil exporters and
importers in 2018, USDEC
reported.
The fast-growing mar-
ket spans nearly 4,000 miles
from the coast of Morocco
to the eastern side of Oman.
Dairy demand in the region is
strong, and USDEC expects
dairy ingredient and cheese
imports to increase by more
than 160,000 tons and 85,000
tons, respectively, from 2016
to 2021.
Part of the rationale for
doubling down in MENA is
that increasing U.S. dairy ex-
ports in the years ahead will
take more than sales to Mex-
ico, Southeast Asia, China,
Japan and Korea, Levitt said.
“Those markets alone
won’t get us to our goals. The
MENA region is a large dairy
importing region, and that
should continue to grow,” he
said.
USDEC will continue to
defend and grow U.S. share
in critical dairy export mar-
kets, but to reach the Next
5%, MENA must get more
attention, USDEC stated in
a press release on the new
hires.
In addition to the new po-
sitions in MENA, USDEC
will be adding three in China,
two in Southeast Asia, one in
Japan and one in Korea.
Dairy prices continue to slip
DOT again delays ELD mandate for livestock haulers
By LEE MIELKE
By CAROL RYAN DUMAS
For the Capital Press
A
fter weighing last
week’s February Milk
Production and Cold
Storage reports, plus Tues-
day’s Global Dairy Trade auc-
tion, traders took the Cheddar
blocks to a Friday close of
$1.5450 per pound, down 4
cents on the week and 3 cents
below a year ago. The bar-
rels finished at $1.51, down
a nickel on the week and
three-quarter cents below a
year ago, when they plunged
10 1/4-cents.
The blocks were un-
changed Monday and Tues-
day. The barrels lost a penny
Monday and stayed there
Tuesday, at $1.50.
Dairy Market News re-
ports that demand for cheese
is trending up. “Manufac-
turers of most varieties and
styles are reporting bullish
ordering ahead of the spring
holidays. On the other hand,
for some Midwestern pro-
ducers, Northeastern weath-
er continues to hinder sales
as the fourth “nor’easter” in
three weeks struck the dense-
ly populated customer base.”
Spot milk prices are dis-
counted $3 to $4 under Class,
with no shortage of milk of-
fers. Cheese inventories are
generally long, but vary from
manufacturer to manufactur-
er. Some barrel producers are
suggesting their stocks are
lighter than expected.
Although milk availability
is ample, some Western cheese
processors are not running at
full capacity but are planning
to increase output in the com-
ing weeks as the spring flush
gets near. Overall, cheese
supplies are “copious,” says
DMN. “Some cheese outputs
are being stocked for future
usage as current demand, al-
though strong, seems to still
be below total production
levels. Export market activi-
ties are flat and are expected
to remain the same unless do-
mestic or international cheese
prices change.”
The Daily Dairy Report’s
Sarina Sharp warned in the
March 16 Milk Producers
Council newsletter that im-
proved export demand has
helped cheese prices, “but
domestic demand accounts
for about 95 percent of cheese
consumption. It’s going to
be hard to make a dent in
the massive cheese stockpile
without a hearty domestic
hunger for cheese.”
Cash butter finished last
week at $2.19 per pound,
down 2 cents but 6 cents
above a year ago, with 39 car-
loads exchanging hands.
Monday’s butter was down
a penny and held there Tues-
day at $2.18.
Butter producers report
that demand is at or near
expectations, according to
DMN. “Undoubtedly, spring
holiday orders have been
fulfilled and production is
generally quieter. A number
of Central butter makers are
buying from the Western re-
gion where cream supplies,
along with discounted spot
loads, are abundant.
Western butter makers are
“seeing the window of spring
holiday demand starting to
close,” and export demand
has been slow to develop.
“Manufacturers are not over-
Dairy
Markets
Capital Press
Lee Mielke
The U.S. Department of
Transportation has granted
agricultural haulers anoth-
er 90-day reprieve from a
national mandate requiring
electronic logging devices to
track their time on the road.
The waiver comes as a
relief to animal agriculture
groups as they continue to
work with DOT’s Federal
Motor Carrier Safety Admin-
istration on the complexi-
ties of limitations on drivers
transporting live animals.
Those groups contend the
livestock hauling industry is
not prepared and needs more
training on ELD technology
and clarification of the rules
applying to livestock haulers’
time behind the wheel. They
also question whether local
law enforcement is aware of
agricultural exemptions.
The FMCSA said it would
take additional steps to ad-
dress the unique needs of
agricultural industries and
provide further guidance to
assist in the effective imple-
mentation of the ELD rule
ly concerned, however with
plenteous amounts of cream
and active butter production,
many expect butter invento-
ries to grow.”
Spot Grade A nonfat
dry milk closed Friday at
69 1/4-cents per pound, up
three quarter-cents on the
week but 13 cents below a
year ago. The powder was un-
changed Monday but inched
up a half-cent Tuesday, to 69
3/4-cents per pound.
Cash dry whey closed its
second week of existence at
28 3/4-cents per pound, down
a half-cent on the week, with
no sales reported. The latest
Ag Market Service surveyed
dry whey price dropped
1.4 cents to 24.06 cents per
pound.
Monday’s whey was un-
changed but it crept a quar-
ter-cent higher Tuesday on a
sale, to 29 cents per pound.
Dairy stocks high
Courtesy of Tim O’Byrne/Working Ranch magazine
The U.S. Department of Transportation has extended a waiver for
electronic logging devices for agricultural trucks.
without impeding commerce
or safety.
The agency hopes to do
additional outreach on the
devices to agriculture and
specifically livestock haul-
ers, Allison Cooke, execu-
tive director of government
affairs for National Cattle-
men’s Beef Association, said
in a podcast.
The agency also hopes to
be able to provide guidance
on the 150 air-mile exemp-
tion for agricultural haulers
as well as other information
that will be helpful as the in-
dustry moves down the path
on ELD and hours of service
requirements, she said.
“Through this whole con-
versation on ELD, we know
that the larger issue at hand
is hours of service,” she said.
The hours of service rule
limits commercial truckers
to 11 hours of driving time
and 14 consecutive hours of
on-duty time in a 24-hour
period. Once they reach that
limit, they have to pull off the
road for 10 hours before driv-
ing again.
That “just really doesn’t
work for the livestock haul-
ing community. We have an
animal welfare piece that we
have to be concerned about at
all times,” she said.
Weather plays a big fac-
tor, and livestock haulers
have to be worried about how
that can negatively affect ani-
mals, she said.
In asking DOT for the
waiver, National Pork Pro-
ducers Council argued that
because livestock is vulnera-
ble to health issues triggered
by extreme temperatures,
long-established
industry
standards preclude drivers
from stopping while hauling
animals. That could cause
them to run afoul of the ELD
and hours of service rules.
“Drivers hauling livestock
have a moral obligation to
care for animals they’re haul-
ing regardless of any regula-
tions,” Jim Heimerl, NPPC
president, said in a press re-
lease.
The waiver will give DOT
and Congress additional time
to find a solution that meets
the unique needs of livestock
haulers, he said.
Cooke said NCBA is
working with Congress on
language to fix the hours of
service rule so it works for
livestock haulers.
Dairy product inventories
saw large gains in February,
particularly on butter. The
Agriculture Department’s lat-
est Cold Storage report shows
Feb. 28 butter stocks swelled
to a just under 277 million
pounds, up 50.2 million
pounds or 22.1 percent from
January and 7 million pounds
or 2.6 percent above February
2017. Revisions added 2.8
million pounds to the January
total.
American type cheese
grew to 762.7 million pounds,
up 20.9 million pounds or 2.8
percent from January and 18.1
million or 2.4 percent above a
year ago. Revisions added 3.6
million pounds to the January
inventory.
The other cheese category
totaled 523.5 million pounds,
up 15.4 million pounds or 3.0
percent from January and 68.7
million or 15.1 percent above
a year ago.
That nudged the total
cheese inventory to 1.3 bil-
lion pounds, up 35.5 million
pounds or 2.8 percent from
January and 87.7 million or
7.2 percent above a year ago.
Class I up
The April Federal order
Class I base milk price was
announced at $14.10 per hun-
dredweight, up 74 cents from
March but $1.95 below April
2017. It equates to $1.21 per
gallon, up from $1.15 in
March and compares to $1.45
a year ago.
The four month average is
at $14.29, down from $16.78
at this time a year ago and
$14.30 in 2016.
Culling drops
Dairy cow culling dropped
sharply in February but was
still above February 2017.
The Agriculture Department’s
latest Livestock Slaughter
report shows an estimated
260,700 head were slaugh-
tered under federal inspection
in February, down 29,100
head from January but 7,500
above a year ago, up almost
3 percent. A total 550,400
head were “retired” from the
dairy business in the first two
months of 2018, up 28,100
head or 5.4 percent.
ROP-12-2-1/102