By LEE MIELKE
Mielke Market Weekly 

There wasn’t much encouragement in last week’s Global Dairy Trade (GDT) auction, which saw the weighted average for all products offered drop 4.3 percent, following a 2.2 percent decline in the May 19 event, and a 3.5 percent decline May 5. This is the sixth consecutive session of loss.

All products offers were down, led by butter, down 10.0 percent, following a 3.2 percent decline in the last event. Anhydrous milkfat was next, down 7.4 percent, following a 4.8 percent decline last time. Buttermilk powder was down 7.0 percent, following a 3.2 percent gain last time; lactose was down 6.9 percent, after a 0.9 percent gain last time. Rennet casein was off 4.4 percent, after inching 0.4 percent lower last time. Whole milk powder was down 3.1 percent, following a decline of 0.5 percent in the last event. Skim milk powder rounded out the declines, off 1.3 percent after a 3.6 percent decline last time. No cheese was offered last week.

FC Stone reports the average GDT butter price June 2 equated to about $1.1882 per pound U.S., down from $1.3205 per pound in the May 19 event ($1.1592/lb. on 80% butterfat, down from $1.2883/lb.). Contrast that to CME butter, which was at $2.0050 on Monday but closed Friday, June 5, at $1.90 per pound. GDT skim milk powder, at 89.92 cents per pound U.S., is down from 90.36 cents per pound, and the whole milk powder average at $1.0473 per pound U.S., compares to $1.0841in the last event. CME Grade A nonfat dry milk price closed Friday (June 5) at 88 cents per pound.

Regarding the absence of cheese last week, FC Stone dairy broker Dave Kurzawski said, "The one thing that seems safe to say is that the Cheddar auction is not bullish. The question is: Is it bearish or just quiet? I side with the latter.

"Reduced volume offerings during the slow milk production time are not unusual. I would think offers on Cheddar are also light this time of year in part because of a push to make more mozzarella. Moreover, Cheddar demand is likely going towards European product due to price discounts there."

HighGround Dairy’s Eric Meyer warned in his latest New Zealand Dairy Report that "Too much milk is still a concern across the globe and therefore difficult to justify dairy commodity prices rising in the coming months.

"Taking a long-term view, it is likely that global dairy consumption growth rates will exceed production over the next six months creating a more balanced market. Exactly how long it takes for markets to come back to equilibrium will depend on the extent of which stocks have built throughout the supply chain."

The 261 dairy producers who selected the highest coverage level of $8 per cwt. will receive a payment for the second coverage period of the new Margin Protection Program for dairy, according to the May 29 Daily Dairy Report (DDR).

"Based on data recently released in USDA’s Agricultural Prices report, the margin for the March-April period was $7.50 per cwt.," the DDR states. "This translates into a payment of nearly 49.5 cents per cwt. for the producers who selected the maximum protection level. This is about 2 cents higher than the premium cost for producers covering less than 4 million pounds of milk. On average, the 261 producers will pocket $1,847 minus a 7.3 percent federal sequestration deduction."

National Milk Producers Federation (NMPF) President and CEO Jim Mulhern took on the global "food fight" in his monthly editorial, stating that "NMPF, the U.S. Dairy Export Council, and the Consortium for Common Food Names have been sounding the alarm bells for several years about how the European Union and it’s mainly just a subset of food companies and countries within Europe want to restrict trade by monopolizing common foods names for their exclusive use."

He said he spent a week in May traveling to Brussels, Berlin and Dublin to "deliver the message to a variety of EU policymakers and dairy stakeholders that these efforts to bastardize the concept of geographic indicators are indeed a very bad thing. If pursued by the EU’s trade negotiators, this effort will doom the prospects for a U.S.-EU Transatlantic Trade and Investment Partnership. This blatantly anti-competitive approach is something that America’s policymakers just won’t swallow.

Another important message to make clear was that, from the U.S. perspective, some use of geographic indicators can be beneficial…in moderation," Mulhern wrote. "But the legitimate use of compound names is very different than restricting the use of common, generic names, including parmesan, feta, asiago and havarti, just four examples where the EU has been fighting hard to monopolize these names for some member states (even though feta and havarti do not refer to any city or region in the world, let alone a region of Europe). You can read Mulhern’s entire editorial at www.nmpf.org

Meanwhile, Cooperatives Working Together (CWT) accepted six requests for export assistance this week from Maryland & Virginia Milk Producers, Northwest Dairy Association (Darigold) and Upstate Niagara/O-AT-KA who have contracts to sell 3.702 million pounds of Cheddar, and Monterey Jack cheese, and 110,231 pounds of butter to customers in Asia and the Middle East.

The product has been contracted for delivery through November 2015 and put CWT’s 2015 cheese exports at 35.18 million pounds plus 26.59 million pounds of butter, and 20.1 million pounds of whole milk powder to twenty eight countries.