WASDE: USDA Expects Chinese Tariffs To Reduce Exports
In the July 12 World Agriculture Supply and Demand Estimates (WASDE) report on Thursday, USDA detailed the effect they expect Chinese tariffs to have on dairy exports.
USDA left the 2018 fat basis export forecast unchanged from the previous month but raised 2019 exports as the U.S. is expected to be price competitive and higher expected exports of butterfat products will more than offset expected declines in cheese exports.
However, the agency reduced 2018 and 2019 exports on a skim-solids basis from the previous month primarily on lower than expected exports of skim milk powder and whey products because of Chinese tariff’s.
The 2018 price forecasts for butter, cheese, nonfat dry milk and whey were reduced from last month. Additionally, USDA lowered the price forecast for all of those products aside from butter for 2019 as well citing cheese stocks and the need for NDM and whey to remain price competitive for export markets.
USDA expects lower Class III and Class IV prices in 2018 and 2019 than forecasted last month. The agency expects 2018 all-milk prices to range from $15.95 to $16.25 and the price for 2019 is anticipated to be $16.25 to $17.25 per cwt.