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As printed in our October 25, 2015 issue...



IN FINAL TPP TALKS, Canada successfully negotiated a trade pact that kept nearly 97 percent of its dairy markets out of reach from foreign competition. In making the deal for 3.25 percent access, its government awarded $3.3 billion in compensation for the dairy and poultry sectors.

AS FOR THE U.S., dairy gained little in final Trans-Pacific Partnership (TPP) negotiations as it already had duty-free agreements with five of the remaining 10 partners. For more discussion, turn to page 672.

CLASS III FUTURES AVERAGED NEAR $16 for November to April contracts at the magazine's close. In recent weeks, contracts inched up nearly 40 cents per cwt. during CME trading despite strong global inventories.

THE LONG-TERM FORECAST REMAINED BEARISH as USDA reduced its 2016 All-Milk price forecast to a $16.50 midpoint. This marked the fifth straight month it lowered the prediction from an opening $17.95.

IT MAY BE 2017 BEFORE MILK PRICES RECOVER, predicted CoBank. The U.S. recovery is unlikely to gain traction without support from exports, and the medium term outlook for U.S. exports is unfavorable, wrote its economists, adding price risks lie predominantly on the downside.

U.S. CHEESE EXPORTS FELL for the fifth straight month, down 28 percent from last year and the lowest total in 31 months. On a total milk solids basis, U.S. exports were 14.9 percent of production; 16.2 percent last year.

LONGER TERM, THE FUTURE LOOKS BRIGHT FOR DAIRY as global per capita dairy consumption could grow 13.7 percent by 2023, predicted the International Dairy Federation. Most recent surveys indicate global per capita intake stood at 244 pounds; the U.S. was 614.

WITH THE SCIENTIFIC TIDE TURNING on saturated fats, whole milk and butter consumption have grown. As a result, the U.S. could have a structural deficit for butterfat for decades, predicted one ag economist.

TIGHT DOMESTIC SUPPLIES caused butter to swing widely in the past 30 days, reaching a record $3.13-1/2 per pound before slipping to $2.42-1/2.

THERE WAS A $7.69-1/2 MARGIN AFTER FEED COSTS, USDA calculated for July and August milk. It was based on $3.74 per bushel corn, $366.78 per ton soybean meal, $164 per ton alfalfa and $16.65 milk.

BRIEFLY: Dairy product prices rose for the fourth consecutive trading session (every other week) at New Zealand's Global Dairy Trade. With imports exceeding trigger levels, USDA began procedures to place duties on butter and sour cream. U.S. per capita cheese consumption set a record for the seventh consecutive year, with 34.17 pounds eaten annually. Mozzarella set the pace at 11.16 pounds; Cheddar 9.68. EPA's implementation of WOTUS (Waters of the U.S.) rule in all 50 states was blocked by the Sixth Circuit Court of Appeals.
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