Global trade took the news spotlight the first full week of August as President Trump announced the addition of 10 percent tariffs on another $300 billion in Chinese imports to the U.S., effective Sept. 1. China responded by letting its yuan value tumble and state-owned companies ceased purchases and imports of U.S. agricultural products.

There was more talk of a free trade agreement between the U.S. and Japan and reports that Britain’s new Prime Minister Boris Johnson seeks a FTA with the U.S. after the UK leaves the European Union.

Reuters reported Friday that Indonesia’s trade minister has asked dairy product importers to “find new sources of supply other than from countries in the European Union,” and will propose a 20 percent-25 percent tariff on EU dairy products in response to EU duties on biodiesel from Indonesia.

HighGround Dairy points out that “Indonesia's dairy imports reached record levels in 2018 and are off to a strong start this year as well. Should these tariffs become reality, there will be a strong opportunity for the U.S. and New Zealand to increase volumes to the region. The bulk of the product shipping from the U.S. is in the form of skim milk powder, followed by whey and lactose, all of which have the potential to grow as those are the products that are heavily imported from the EU as well.”

Meanwhile, butter’s price woes continue and were a part of the downturn in Tuesday’s Global Dairy Trade auction (GDT). The weighted average of products offered fell 2.6 percent, following a short lived 2.7 percent “recovery” on July 16. That followed four previous declines. Sellers brought 77.1 million pounds of product to the market, up from 55.1 million in the last event and the highest since December 18, 2018.

The U.S. Dairy Export Council (USDEC) reports that “Lost sales to China due to retaliatory tariffs and African swine fever, plus strong competition elsewhere from European and New Zealand suppliers, resulted in lower U.S. export volume in the first half of 2019. Shipments of milk powders, cheese, butterfat, whey products and lactose were 1.0 million tons, down 14 percent from last year’s record pace. Exports of these major products to China were down 54 percent, while sales to other markets were up 5 percent.”

“Overall value of U.S. dairy exports reached $2.95 billion in the first half, up for the third straight year. Suppliers saw notable gains in sales value to Mexico, Southeast Asia, South Korea, Canada, and South America, offsetting a large decline in sales to China.”

HighGround Dairy warns that “While exports have been weak, so has the availability of incremental milk for processing, which led to counter-seasonal stock drawdowns in cheese into summer. Domestic demand for butter and cheese will rise into the coming months and will help offset the slower movement of export volumes across the dairy sector, creating a tighter atmosphere for fat and protein in fourth quarter. However, the long-term outlook is bearish as domestic commodity prices for cheese/butter are not competitive, and both Oceania and EU slowly take on the lost US market share into China, which is soon becoming an irreversible trend as the trade war worsens.”

The Consorzio Tutela Mozzarella di Bufala Campana, the U.S. Dairy Export Council (USDEC), and the Consortium for Common Food Names (CCFN) signed an historic agreement August 5 that is expected to “pave the way for a new dialogue on the protection of products of origin in the United States and in global markets, including those bearing geographical indications (GIs), while respecting the rights of companies to produce and market products bearing generic names.”

A joint press release posted on the USDEC website said, “The new agreement provides greater support for robust protection in the United States and around the world for the Mozzarella di Bufala Campana Protected Designation of Origin (PDO), while unequivocally establishing the free use of the generic term ‘mozzarella’ to indicate a type of cheese.”

“The agreement recognizes the distinctive character of the name Mozzarella di Bufala Campana PDO and its territory of production. It also recognizes the rights of all to freely use the term ‘mozzarella’ to describe a cheese produced according to the definition provided by the Codex Alimentarius or the U.S. Food and Drug Administration Standards of Identity.”

Grade A nonfat dry milk closed Friday at $1.0275, up three-quarter cents on the week and 19 3/4-cents above a year ago, with 12 cars finding new homes.

CME dry whey closed the week at 35 1/2-cents per pound, up 1 1/2-cents but 47 1/2-cents below a year ago, with only 1 car trading hands on the week.

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.