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8 CapitalPress.com July 20, 2018 Dairy Export picture promising, but tariffs loom, analyst says Subscribe to our weekly dairy or livestock email newsletter at CapitalPress.com/newsletters By CAROL RYAN DUMAS Capital Press TWIN FALLS, Idaho — Global milk production is slowing, and prices among the major exporting countries have started to converge over the last few months. U.S. producers are strug- gling a little, but U.S. products have become more compet- itive in global markets, Aga Dobrowolska-Perry, dairy an- alyst with RaboResearch said during a Rabo AgriFinance client dinner on Thursday. “I think milk prices are go- ing to do a little better,” she said. Buyers will be coming back into the market and tak- ing pressure off prices. The holiday season will also pro- vide some support, she said. “There are a lot of opportu- nities in the market,” she said. The U.S. is still pretty much the lowest-cost market for cheese, whey and milk powder, and the U.S. dollar is a little weaker than it was last year. Global dairy imports are up 5 percent year over year, and U.S. exports are moving at a record pace, she said. Domestically, foodservice Carol Ryan Dumas/Capital Press Aga Dobrowolska-Perry, left, an analyst with RaboResearch, talks with Maria Ziebarth, Rabo Agri- Finanace senior customer relationship specialist, during a client dinner in Twin Falls, Idaho. sales keep growing and con- sumers continue to be excited about dairy products. The U.S. is sitting on more stocks, but it’s also producing more prod- uct, she said. “There are more products to go around, but that’s not necessarily a bad deal,” she said. What’s concerning is the tariff situation. The U.S. has alienated its three largest cus- tomers — Mexico, Canada and China — which account for 45 to 50 percent of all U.S. dairy exports, she said. Historically, tariff spats have been a show of pow- er that causes a little pain for three to six months until countries sit down and work things out, she said. But the current U.S. ad- ministration appears to have a longer-term strategy, and the affected trading partners are taking a strong position of not backing down, she said. “I’m afraid we’re prepar- ing for a 12- to 24-month” stretch of impacts from the trade disputes, she said. The implications for trade with Mexico are particularly concerning because Mexi- co accounts for 30 percent of U.S. dairy exports. The country’s rhetoric has gotten tougher, and it’s looking for other suppliers, she said. While U.S. exports to Mexico continue to grow as the total pie has gotten big- ger, the U.S. share of that pie is decreasing, she said. Cheese plays a major role in exports and one bright spot is that even with the added tariffs, U.S. cheese prices are still low compared with other exporting countries that face even higher tariffs. Another is the likelihood that other buyers would act as export middlemen, she said. “I think ultimately if we can’t do trade directly, third parties would be willing to help us out — with a little sliver from both ends going to that middleman,” she said. “Mexico and China de- pend on our product; they’ll find a way to get it in. Ulti- mately, economics win out over politics, she said. Another thing to watch in export markets is the bacteri- al mycoplasma bovis disease in New Zealand, which could create new channels for U.S. exports in filling the void in that country’s exports, she said. Washington 2017 dairy ambassador killed in vehicle collision Father also dies in Oklahoma crash Capital Press Washington State Dairy Women Anna Teachman, the 2017-18 Washington state dairy ambas- sador, was killed along with her father, Michael Teachman, in a two-vehicle collision that occurred July 9 in Oklahoma. The Washington dairy industry is mourning the deaths of Anna Teachman, the 2017-18 state dairy am- bassador, and her father, Michael Teachman, who were killed in a vehicle crash Sunday in Oklahoma. Anna Teachman, 19, and her father, 57, both of SeaT- ac, were traveling in the Tulsa area. A pickup towing a trailer crossed the center- line of a state highway and collided with the car driv- en by Michael Teachman, according to the Oklahoma Highway Patrol. Anna Teachman planned to enroll in the fall at Okla- homa State University and major in agricultural communications and was attending an orientation, according to the Dairy Farmers of Washington. She was selected state dairy ambassador in June 2017 and represented the industry at public events the following year. “I feel so blessed to have spent the last year with this outstanding young lady,” Dairy Farmers of Wash- ington CEO Scott Kinney said in a statement. “Thank you, Anna. Even though you were with us for just a short time, you made an im- measurable difference to so many lives.” Anna Teachman did not grow up on a dairy farm, but was interested in dairy cows from an early age, ac- cording to Dairy Farmers of Washington. She joined a 4-H club and exhibited projects at county and state fairs and was a delegate to the national 4-H dairy con- ference. She spoke to House members in January on Dairy Day in Olympia. Ac- cording to the ambassador program, she told lawmak- ers that she grew up six minutes from the Sea-Tac Airport. “No matter if we grew up in rural agriculture or in the city, we can work together to strengthen and protect dairy farming and agriculture in Washington state,” she said. The pickup driver, Timo- thy M. Mullin, 57, of Cleve- land, Okla., was treated for injuries at a hospital, ac- cording to the highway pa- trol. The accident is under investigation. John Deere Dealers See one of these dealers for a demonstration Oregon, California farmers reappointed to dairy board By DESIREE BERGSTROM Capital Press Warren L. Chamberlain of Oregon and Brad J. Scott and Pauline Tjaarda of California were reappointed to their seats on the National Dairy Promo- tion and Research Board in an announcement from Agricul- ture Secretary Sonny Perdue. Michael R. Oosten of Cali- fornia, has also been appointed to fill an open seat. The new terms begin in November and will last three years. Oosten, however, will only serve until October of 2019. The National Dairy Pro- motion and Research Board, known as the Dairy Checkoff Program, promotes dairy prod- ucts and provides funding for research. Dairy farmers pay a 15 cent-per-hundredweight assess- ment on their milk, and import- ers pay 7.5 cents a hundred- weight to fund the program. Purdue said the new appoin- tees will aid in the “promotion and research to maintain and expand” dairy markets. He also said that the individuals will serve the dairy industry well. The board is made up of 37 individuals from 12 regions. Each member is selected by the secretary after nominations are submitted by various dairy and farm organizations. Dairy Markets Lee Mielke CME prices push higher, then slip By LEE MIELKE For the Capital Press C 29-3/102 ash dairy prices were mostly higher last week. Block Ched- dar closed “Friday the 13th” at $1.56 per pound, up 1 3/4-cents on the week but 11 1/2-cents below a year ago. The barrels finished at $1.4225, up 17 3/4-cents on the week and 5 1/4-cents be- low a year ago. The blocks inched a half- cent higher Monday but lost 3 3/4-cents Tuesday, dipping to $1.5275. The barrels were unchanged Monday and gave up 4 3/4-cents Tuesday and fell to $1.3750, 15 1/4-cents below the blocks. Matt Gould, analyst and editor of the Dairy and Food Market Analyst newsletter, warned in Monday’s Dairy Radio Now broadcast that tariffs will result in the loss of about $1.10 per hundred- weight for dairy farmers in the second half of 2018 because about a quarter of U.S. dairy exports go China and Mexico. He said he knows of orders being canceled so “it’s very real. It’s hitting home.” Dairy Market News says demand reports from Mid- western cheesemakers di- verge from slow to very busy. Although Western cheese- makers are arguably the most impacted by recent tariffs, there are upper-Midwestern producers who ship globally. They are concerned but have yet to see what impact tariffs will have near term. Milk supplies are lessening, says DMN, and milk premiums were reported for the first time since March. Western cheese export demand is somewhat slow. Contacts report that Mexican buyers have started to look for alternative providers in the European market as import tariffs on U.S. cheese have increased. Cash butter saw a Friday close at $2.2250 per pound, up 5 1/2-cents on the week but 37 1/2-cents below a year ago, with 21 sales reported on the week.
