California dairy farmers said “Yes.” And the Agriculture Department therefore announced June 7 that the nation’s largest milk producer will become part of the Federal Milk Marketing Order. The new order will be officially be implemented on Oct. 17 when USDA releases the November Class I base milk price. Affected parties will be required to comply with all provisions starting Nov. 1.

Western United Dairymen stated in a press release; “We all hope the FMMO will help level the playing field on farm milk prices for California’s dairy families and look forward to working with USDA/AMS staff to help producers understand this new regulatory structure as implementation moves forward. The dairy farm economy has been too challenging for too long.”

Meanwhile; the gears reversed again in the June 5 Global Dairy Trade (GDT) auction, this time with the weighted average of products offered falling 1.3 percent, following a 1.9 percent uptick May 15 and a 1.1 slippage on May 1.

Cheddar cheese led the declines, down a bearish 3.6 percent, following a 4.4 percent ascent last time. Butter was down 3.5 percent, after it rose 2.4 percent. Anhydrous milkfat slipped 1.7 percent, after it led the gains last time with a 5.8 percent advance, and whole milk powder was off 1.1 percent, after it inched 0.2 percent higher on May 15.

Buttermilk powder led the gains, up 17.7 percent, after not trading in the last event. Lactose was up 3.9 percent and rennet casein was up 2.7 percent. Skim milk powder inched 0.3 percent higher after a strong 3 percent rise last time.

HGD’s Lucas Fuess said in the June 11 “Dairy Radio Now” broadcast and reported that, ironically the U.S. had another great month in exporting dairy products. He said “All products posted higher exports versus prior year levels and 2018 is shaping out to be a record year for US dairy exports.”

Nonfat dry milk posted another record high, he said, third month in a row powder exports set a new record. Nonfat dry milk exports were up 17.7 percent from March, which itself was a record export month. Nonfat dry milk exports to Mexico were up 28 percent versus 2017 and accounted for a 41 percent market share.

Whole milk powder shipments also continued strong, more than double prior year levels for two months in a row now. Volumes to China continued to impress, importing an additional 2,394MT in April versus prior year and becoming the top destination with 54 percent market share, according to HGD.

The U.S. Dairy Export Council President and CEO Tom Vilsack warned; “Tariffs on cheese will potentially eliminate the competitive advantage we have in our No. 1 market. That is a legitimate concern.” He said the council will analyze the potential impact of the tariffs and “work to mitigate their negative impact.”

Just a quick heads-up from FCStone; “China is desiring to balance the trade books with the U.S. One way they can do that is to buy more energy and agricultural products from the U.S., including corn.”

Cash dairy markets weakened, perhaps over trade concerns, but rallied as the first week of June Dairy Month progressed.

Plants report that cheese production is steady to increasing, but lighter demand may reverse that. Demand remains slow to steady, depending on variety and destination. Pizza cheesemakers report that Eastern buyers “have been falling back on necessity buying of late, as market prices have slipped since early May. Some Midwestern cheesemakers point to Mexican tariffs as a potential cause for concern, while suggesting effects may not be felt until later in the year.”

Western cheese makers report that “Cheese customers are making regular draws, but not asking for more right now. The unofficial start to summer passed and grilling season is upon the nation. However, terms are ending for the school year and food service demand is shifting. Buyers and manufacturers are adjusting to the new consumption patterns. In some cases, processors are planning to slow the cheese vats, despite the widespread availability of cheap milk. Inventories are healthy, but not burdensome. Contacts hope export demand continues to grow, but some have lingering concerns about trade discussions, potential tariffs, currency rates, shipping and other trade issues.”

Cream remains fairly tight for some upper Midwest butter makers, according to DMN, though bulk butter is very available, particularly from the West. “Production is picking up a bit, as fall storage preparations are under way. Some regional analysts have relayed that U.S. butter markets may have hit their 2018 apex. They suggest inventory increases in the U.S., and in some import destinations, are going to impact the markets during what is typically the butter boom season, the fall. That said, butter markets have been especially resilient in the face of bearish holdings reports month after month,” says DMN.

Western butter output is following seasonal norms as cream continues to be readily available. Butter inventories are growing. Domestic demand is strong and orders from the international market are steady compared to the previous week.

The latest Crop Progress report shows that 86 percent of the nation’s corn is emerged, as of the week ending June 3, up 2 percent from that week a year ago and 3 percent ahead of the five year average. It also shows 78 percent of the corn is rated in good to excellent condition, up from 68 percent a year ago.

The report shows 87 percent of the soybeans have been planted, up from 81 percent a year ago and compares to 75 percent in the five year average. There is 68 percent of the crop emerged, up 13 percent from a year ago and 16 percent ahead of the five year average. Cotton planting is at 76 percent, 2 percent behind a year ago but even with the five year average.

Updating our story from last week on the Mycoplasma bovis (MB) outbreak in New Zealand; the Daily Dairy Report’s Sarina Sharp wrote in the May 1 Milk Producers Council newsletter that “New Zealand’s Ministry for Primary Industries (MPI) plans to force the slaughter of roughly 150,000 cattle, about half of which are likely to come from the milking herd, in an attempt to eradicate MB.”

The DDR adds that “The MPI has not historically tracked domestic cattle movements thoroughly, so it is poorly positioned to eradicate the disease, but ‘if we don’t try now, we will never get another chance.

The MPI’s approach toward eradication is paradoxically both aggressive and timid. Extensive culling and an expected cost of $1.2 billion (NZ), or $830 million (U.S.), are certainly ambitious. But to preserve dairy producers’ cash flows, the MPI has demurred and will allow producers to continue milking through the upcoming season. Culling of infected herds is assured, but it will not be immediate. Eradication is far from certain.”

The views and opinions expressed in this column are those of the author and not necessarily those of Farm World. Readers with questions or comments for Lee Mielke may write to him in care of this publication.