Chinese Tariffs Strike Dairy Products Hard
After President Trump levied tariffs on $34 billion worth of Chinese goods and potential food another $16 billion later on, China struck back on Friday with it’s own tariffs, mainly targeting U.S. agricultural products.
Products found on China’s retaliatory list include soybeans, corn, wheat, cotton, rice, sorghum, beef pork, poultry and dairy products. Dairy products that will likely be most affected by increased tariffs include cheese, nonfat dry milk, whole milk powder and whey powder.
CME spot product markets reacted to this news as expected. Cheddar barrels fell 5 and ½ cents Monday and closed at $1.39 and ½ cents per lb. on 8 trades. Over the past 5 trading sessions, barrels have lost 17 cents per lb. Blocks closed unchanged at $1.59 and ½ cents and extended the block to barrel spread to 20 cents. Butter declined 3 cents on 4 offers and settled at $2.32 and ¼ cents while Grade A nonfat dry milk was 2 and ¾ cents lower at 76 cents per lb.
Dry whey softened to 40 cents, down one penny. Class III milk prices were annihilated in both 2018 and 2019 on Monday. July-December 2018 ranged 22-36 cents lower while 2019 recorded double digit losses in all months except for November. January-August dropped 18-22 cents. Class IV milk incurred similar weakness as it was down 22-34 cents July-October and 5-16 cents in the November 2018 to March 2019 time period.