The Cooperative’s Working Together (CWT) export assistance program will begin assisting sales of whole milk powder beginning April 16, CWT’s Jim Tillison told DairyLine Radio this week.
“The whole milk powder situation in the world market is very important,” Tillison told DairyLine’s Bill Baker. “It’s my understanding New Zealand, for example, has shifted nearly all its production to whole milk powder because there’s such a demand out there.”
“We did an economic analysis to determine how (U.S.) prices compared to world prices, and whether assistance was needed,” he continued. “We determined assistance was needed, so we decided to add that product to the cheddar cheese, Monterey Jack, gouda cheese and butter we already are providing assistance for sales.”
Like sales of other products receiving CWT export assistance, whole milk powder sales to Mexico and Canada will not be eligible. “We have the North American Free Trade Agreement, and products should be able to move there without assistance,” he explained, adding that Asia and the Middle East will likely be the primary markets, with some also exported to North Africa.
“The beauty of whole milk powder is that it utilizes both butterfat and nonfat dry milk powder solids, so we should see a positive impact,” he said.
Tillison also recapped CWT’s first quarter, saying the program had accepted 231 bids for cheese and butter export assistance, resulting in sales of 1.075 billion lbs. on a milk equivalent basis.
“While U.S. milk production grew 1.7 billion lbs. in the first two months of 2012, CWT exports have already accounted for 60% of that increased volume,” he said. “CWT obviously going to have a positive impact on hopefully maintaining, and ultimately increasing producer milk prices.”