Mexico Threatens to Penalize U.S. Cheese Market if Steel Tariffs are Put in Place
Class III milk prices ended the day just a nickel lower in its average from now through the end of the year. The current price average now stands at $16.39 cents per cwt. Despite being lower, the nickel loss is seemingly good news as we await the steel tariffs that were announced by the White House yesterday to be levied against Mexico, Canada and allies in Europe, effective midnight on June 1.
Mexico was very quick to respond that if such tariffs were imposed, they would apply comparable penalties to flat steel, American lamps, pork, fruit and cheese. This would not be good, for the U.S. dairy industry, as single handedly Mexico is our largest customer. However, if recent negotiations with China are any sort of a pattern as to what to expect, a lot can happen in the next several hours.
A quick look at the CME spot trade revealed a much softer tone on Thursday that was led by butter which fell three and 1/2 cents to finish $2.39 cents per lb., 14 loads traded hands. Barrels traded the next highest volume, 12 loads move from seller to buyer. They finished a penny and 1/4 lower at $1. 54 and 1/2. Blocks remained unchanged at $1.60 and 3/4. Grade A nonfat dry milk dropped a penny and 1/2 to fall to 82 and 1/2 cents, just a single load traded hands. Dry whey was the outlier, rising a penny and 1/4 to finish at 39 cents, 2 loads traded.