By LEE MIELKE
Mielke Market Weekly 

Trans-Pacific Partnership (TPP) negotiations ended early last week, but details of its outcome are still somewhat sketchy. So, who got "TP"ed and who profited?

I asked HighGround Dairy’s Eric Meyer if Canada’s supply management program survived, and his answer was, "It seems that it did." He reported that Canada’s International Trade Minister said the TPP "preserves the main pillars of the supply manage system." He said it will mean some lost revenue for Canadian dairy producers, but the losses will likely be mitigated by "a fair compensation package."

Meyer says it appears the U.S. may have gained some access to other countries to export dairy products through the TPP.

New Zealand dairy processor Fonterra expressed disappointment with the TPP in a news release. Fonterra chairman John Wilson said that, while he was "very disappointed that the deal falls far short of TPP’s original ambition to eliminate all tariffs, there will be some useful gains for New Zealand dairy exporters in key TPP markets such as the U.S., Canada and Japan.

"Greater benefits will be seen in future years as tariffs on some product lines are eliminated." He added that "the entrenched protectionism demonstrated by the U.S. dairy industry, in particular, had ensured that the deal on dairy failed to reach its potential."

New Zealand has access to the U.S. dairy market, but is limited by quotas. They gained some access, Meyer said, but it was not as much as they had hoped for.

The Daily Dairy Report (DDR) says Canada will allow imports of fluid milk, but 85 percent must be processed in Canada and, "given the distance of the other TPP partners, the U.S. is likely to be the sole source." "Exporters like New Zealand and Australia are more likely to send milk powders, cheese and butter. The U.S. will reduce or phase out tariffs on dairy products imported from New Zealand."

The TPP must now be ratified, and the DDR speculates that might not happen until early next year in the U.S. while Canadians will vote on it Oct. 19.

Carlene Dowie, associate editor of Australian Dairyfarmer magazine, writes that "The Russian ban on dairy imports from a number of Western countries, including Australia, is unlikely to be lifted until at least 2018," according to Dairy Australia managing director Ian Halliday. The ban on food imports from the U.S., European Union, Australia, Canada and Norway was imposed in retaliation for Western sanctions on Russia over the Ukraine crisis.

National Milk and the U.S. Dairy Export Council (USDEC) have told the U.S. Trade Representative that Russia’s ban is "disrupting global dairy markets and appears to violate international trade rules."

Meanwhile, USDEC reports August exports of U.S. cheese and whey products were at or near multi-year lows, pulling overall volumes down for the fourth straight month. USDEC’s Alan Levitt reports that "Suppliers shipped 139,281 tons of milk powders, cheese, butterfat, whey and lactose in August, down 13 percent from a year ago and down 6 percent from July. Overseas sales were valued at $390 million, down 33 percent from last year and down 6 percent from July. Export value was the lowest since February 2011 (daily-average basis).

Cheese exports fell for the fifth straight month, dropping to 22,658 tons, down 28 percent from last year, and marks the lowest total in 31 months. Sales to every major customer were below a year ago, with a notable decline (down 59 percent) in exports to Japan. Year-to-date exports to Japan were down 39 percent from last year. Shipments to South Korea also have slowed.

With very weak global whey markets, U.S. whey exports continued lower as well, according to Levitt. Total whey export volume, at 32,843 tons, is down 18 percent from last August and the second-lowest figure in five years (daily-average basis). Dry whey exports were off 22 percent; whey protein concentrate was down 16 percent, and whey protein isolate exports were down 11 percent from 2014.

Exports of nonfat dry milk/skim milk powder held up better. Suppliers moved 42,880 tons, slightly more than July, but still down 6 percent from a year ago. Sales to Mexico (up 12 percent) and Southeast Asia (up 8 percent) were above year-ago levels, but volumes to China and Middle East/North Africa were lower.

August fluid milk exports were up 8 percent from last year, led by record sales to Taiwan. Taiwan has been the number-three single overseas customer for U.S. milk this year, with year-to-date purchases up 87 percent, according to USDEC.

Cooperatives Working Together (CWT) accepted 18 requests for export assistance this week to sell 465,175 pounds of cheese, 6.52 million pounds of butter and 1.04 million pounds of whole milk powder to customers in Asia, Europe, the Middle East, North Africa and South America.

Checking dairy prices at home, Cheddar block cheese hit the highest level since Nov. 19, 2014, on Monday (Oct. 5), $1.80 per pound, only to reverse gears the next three days, and then head back up Friday, closing at $1.70, still 4.75 cents below the previous week and 49.75 cents below a year ago. The barrels pole vaulted 11.25 Monday (Oct. 5), hitting $1.73, highest price since June 11, 2015, then gave 11 cents back on Tuesday and closed Friday at $1.62, up a quarter-cent on the week, 48 cents below a year ago, and an above the norm 8 cents below the blocks.