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.