Exports

Cheese Exports Hit All-Time High in March as Global Appetite Grows

Tue, 12 May 2026 13:00:00 GMT

Records were broken with over 63,435 MT exported in the month of March of cheese alone, an all-time high for single month exports, jumping over 29% from March of 2025. Butterfat and AMF exports also set a single month record at 17,074 MT shipped, 109.9% higher than March of 2025.

The world wants U.S. cheese with a shift in desire for western-style foods, more restaurant and food service demand at a competitive price not found in other countries due to our abundance of supply available her in the United States. Cheese exports are trending higher, with the first quarter of 2026 totaling an increase of 23.2% higher year over year.

Meanwhile, butter production was up 1.2% in March while butter exports year-to-date are up nearly 93.2% from the same quarter last year. Which raises the question if the U.S. can keep up with the export demand despite the increasing production. Churns are running seven days a week with growing milk and cream supply and spring flush is here with outstanding weather for cow comfort.

(USDA)

While cheese and butterfat are the stars of the show, milk powders are the most vulnerable in the export category. Nonfat dry milk (NFDM) and skim milk powder (SMP) broke their four-month year over year growth streak with a decline of 8% lower volume in the month of March 2026 when compared to the extremely high volume traded in March of 2026. All is not lost though, March 2026 was still the highest export volume we’ve seen in five months, it’s comparison to March 2025, being the highest export volume of the whole year, makes the year over year data look poorer than it is.

(USDA)

When looking at the dairy export data, the volume is certainly impressive, however the economic impact is outstanding. The value of dairy products exported reached the high dollar amount of $892.4 million in March, the highest monthly value seen in nearly four years. This is an increase of 6% more value year over year as reported from the USDA’s Foreign Agricultural Service.

The biggest markets for U.S. exports of dairy products in total value during the first quarter of the year were Mexico at $675.4 million, up 10% YoY, Canada who declined 19% YoY still came in second with total dollars purchased coming in at $295.4 million, Japan at $156.4 million, up 8%; South Korea at $145.5 million, up 19%; and China dropping 24% in 2026 with ongoing trade negotiations coming in at $123.9 million. All other major customers were under $100 million with anywhere from Colombia up 77% YoY to Philippines down 10% with most showing big increases YoY.

So, while the market wants to focus on the massive amount of production the United States is producing, the export program continues to be a bright light. World demand is continuing to increase, and we have the supply to feed it.

Sarah Jungman is a commodity broker with AgMarket.Net and AgDairy, the dairy division of John Stewart & Associates Inc. (JSA). JSA is a full-service commodity brokerage firm based out of St. Joseph, MO. Sarah’s office is located in Winterset, Iowa and she may be reached at 515-272-5799 or through the website www.agmarket.net .

The thoughts expressed and the basic data from which they are drawn are believed to be reliable but cannot be guaranteed. Any opinions expressed herein are subject to change without notice. Hypothetical or simulated performance results have certain inherent limitations. Simulated results do not represent actual trading. Simulated trading programs are subject to the benefit of hindsight. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. There is risk of loss in trading commodity futures and options on futures. It may not be suitable for everyone. This material has been prepared by an employee or agent of JSA and is in the nature of a solicitation. By accepting this communication, you acknowledge and agree that you are not, and will not rely solely on this communication for making trading decisions.

Global Demand Lifts U.S. Dairy Exports to Near-Record Levels

Tue, 03 Mar 2026 15:05:04 GMT

Every week, dairy news articles circle the impact of the growing milk production in the United States and what factors could possibly help support prices despite the looming supply. The one bright spot helping to elevate the massive supply issue is the extreme growth in exports we’ve seen over the last few years.

In 2025, the United States approached near record export values at a whopping $9.51 billion in dairy products exported. Second to 2022 in dollars of products shipped to other countries. That equates to a 15% increase year over year from 2024 in dollars and 5% more in total volume of dairy products exported.

Currently, the U.S. sells to 143 countries which saw the biggest increase in demand from a wide range of buyers in the Middle East, South Asia, North Africa and South America. We are third largest exporter of dairy products in the world.

In 2025, the U.S. saw a huge increase in butter and milk fat shipments, up over 165% from 2024. Whole milk powder also saw a massive increase, coming in 56% higher than 2024. Cheese and butter product demand is strong both domestically and abroad.

Globally, milk supply is plentiful with the U.S., New Zealand, and the European Union increasing steady. It can be seen when comparing prices as the World Milk Price which has been falling since early last June.

With supply being plentiful and exports strong, the world has all eyes on the conflict in the Middle East. Over the weekend, tensions between Iran and the United States led to strikes on U.S. bases in Bahrain and buildings in Dubai. While not a direct impact to the dairy industry, the tensions can be felt throughout.

For shipments, insurance and freight costs will be a factor, especially near the Strait of Hormuz. Most cargos will see increased cost with the added risk as well as some energy cost spikes, given the impact on crude oil. Insurance companies either drop coverage or increase prices enough to discourage travel through those areas as we saw with the Russian/Ukrainian war. Bottlenecks in logistics may also be a factor going forward.

As far as changes that will directly affect dairy, it is too soon to tell but something the United States, EU and New Zealand are keeping a close eye on. Butter so far has not factored in a risk to demand as Monday trade was higher on the day. Volatility is to be expected whether it comes directly in the futures markets for dairy products or indirectly from the impact seen on the stock market. This can create marketing opportunities, especially in the deferred months which have surpassed the $18 mark in Class III Milk futures for June and beyond.

Sarah Jungman is a commodity broker with AgMarket.Net and AgDairy, the dairy division of John Stewart & Associates Inc. (JSA). JSA is a full-service commodity brokerage firm based out of St. Joseph, MO. Sarah’s office is located in Winterset, Iowa and she may be reached at 515-272-5799 or through the website www.agmarket.net .

The thoughts expressed and the basic data from which they are drawn are believed to be reliable but cannot be guaranteed. Any opinions expressed herein are subject to change without notice. Hypothetical or simulated performance results have certain inherent limitations. Simulated results do not represent actual trading. Simulated trading programs are subject to the benefit of hindsight. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. There is risk of loss in trading commodity futures and options on futures. It may not be suitable for everyone. This material has been prepared by an employee or agent of JSA and is in the nature of a solicitation. By accepting this communication, you acknowledge and agree that you are not, and will not rely solely on this communication for making trading decisions.

USDA Forecasts Significant Drop in U.S. Ag Trade Deficit as Exports Rise

Fri, 27 Feb 2026 21:24:46 GMT

USDA now projects the U.S. agricultural trade deficit will narrow to $29B in FY2026 , down from about $50B a year ago. Undersecretary for Trade and Foreign Agricultural Affairs Luke Lindberg says the trade team isn’t done yet.

(Data: USDA)

“Our goal is to get back to surplus, but going from $50 billion (forecasted) to $29 billion in one year shows tremendous progress, 43% down over this time last year, and we’re continuing to make good progress on seeing that drop even further,” Lindberg says.

Exports rising

Three areas with notable increases in exports by year-end of 2025 include:

Dairy exports up 15%
Ethanol exports up 11%
Corn exports up 29%

Simply put, the U.S. ag trade balance is export value minus import value. Lindberg says the export side of the equation is where his team can make the most impact.

“We’ve seen great opportunities as our producers can take new advantage of some of these trade deals the president has put in place. So, the stat that I love to say right now is over half the world’s population and over half the world’s GDP have come to some kind of a trade agreement with the president in his first year in office. That’s a lot of mouths to feed and a lot of dollars that can be buying U.S. products.”

In recent decades, the U.S. maintained a positive trade balance up until 2020 when the surpluses were much smaller or became deficits.

How USDA says it will push exports

To build back trade, Agriculture Secretary Brooke Rollins’ team is sticking to a three-point plan:

Get better trade agreements.
Build willing buyer and willing seller relationships.
Hold trading partners accountable.

“Our team and our friends over at the U.S. Trade Representative’s Office have done a tremendous job opening up market access with our dealmaker-in-chief, President Donald J. Trump. Our team at USDA plays an outsized role in getting our farmers and ranchers out there to sell their products. I refer to it as building buyer-seller relationships. And so we’re aggressively approaching that this year, with getting our farmers and ranchers and our agribusinesses on the ground in these countries where they have market access today that they didn’t have yesterday,” he says.

Trade missions: 2026 schedule and priorities

To continue to build trade relations and boost exports, Lindberg points to the traditional USDA agribusiness trade missions ( of which there are six scheduled in 2026 ), and the rapid response trade missions called TRUMP missions (Trade Reciprocity for U.S. Manufacturers and Producers).

“We really do have a robust, aggressive schedule this year to make sure we’re quickly getting into these markets that the president has unlocked,” he says. “We need market access. We need to be able to compete on a fair and level playing field to export our products around the world.”

Domestic angle: imports, tariffs, and “level playing field”

As for the domestic demand of ag products, and potentially reducing the value of agricultural imports, Lindberg says farmers should also have a level playing field stateside.

“Our farmers and ranchers now have a better playing field, both overseas, where we’re taking down trade barriers, but also here domestically, through the President’s aggressive use of tariffs and the way in which he has restructured the opportunities that exist domestically for our farmers. And we’re seeing that in the trade data, where on a dollar-for-dollar basis, we’re going to be importing a significant amount less this year than we did even last year. And what that does is it means more Americans, more of their dollars are going towards food that is produced, consumed, slaughtered, raised, processed, right here in the United States of America, and I think that’s a win as well.”

The next agribusiness trade mission is to the Philippines.

U.S. Dairy Exports Surge to $9.51 Billion in 2025

Fri, 20 Feb 2026 17:50:01 GMT

The U.S. dairy industry closed 2025 just shy of an all-time export record, signaling strong global demand and growing diversification across international markets.

According to calendar year 2025 data released by USDA, U.S. dairy exports reached $9.51 billion, narrowly missing the record $9.54 billion set in 2022. That total is up 15% from 2024, showing how U.S. dairy continues to gain ground in global markets.

In addition to higher value, export volumes also increased. According to the International Dairy Foods Association (IDFA), U.S. dairy exports totaled 2.8 million metric tons in 2025, up 5% from the previous year. Growth was driven largely by expanding demand in the Middle East, North Africa, South Asia and South America, regions that are playing an increasing role in strengthening and diversifying U.S. dairy exports.

“This near-record year demonstrates that U.S. dairy exporters are succeeding in diversifying both markets and product portfolios,” says Michael Dykes, IDFA president and CEO. “Growth across North Africa, South Asia, the Middle East, South America and the European Union reflects a deliberate strategy to reduce concentration risk, deepen customer relationships and compete in emerging and established markets alike. Today, U.S. dairy exports reach 143 countries, and our product mix spans consumer-ready foods, high-value ingredients and specialized nutrition products — a level of diversification that strengthens long-term export resilience.”

Regional Growth Highlights

Export growth in 2025 was broad-based, with several regions posting double- and even triple-digit gains. The following breakdown from IDFA highlights how U.S. dairy exports performed by region:

North Africa — Exports surged 107% by value and 69% by volume, reflecting accelerating demand across the region.
Middle East — Exports grew 48% by value and 19% by volume, driven largely by processed cheese, sweetened milk powder, whey protein powder and concentrate, lactose and natural milk products.
South Asia — Exports grew 63% by value and 25% by volume, led by strong growth in India, Pakistan and Sri Lanka. U.S. dairy exports to India alone increased 71% by value and 31% by volume.
South America — Exports grew 14% by value and 7% by volume.
Central America — Exports grew 19% by value and 13% by volume.
North America — Exports grew 6% by value and 2% by volume.
East Asia — Exports grew 14% by value and 2% by volume.
European Union — Exports increased 61% by value and 69% by volume.
Sub-Saharan Africa — Exports grew 9% by value.

Higher-Fat Products Help Drive Momentum

Demand for higher-fat dairy products saw a sharp increase in 2025, contributing to overall growth in U.S. dairy exports. Global export volumes rose by approximately 165% for butter and milk fat and by 56% for whole milk powders, reflecting shifts in global purchasing patterns and increased use of these products in both consumer foods and food manufacturing.

Several other categories also posted solid gains. Dairy spreads, whey protein concentrates and cheese were among the stronger-performing products, indicating continued demand for both value-added ingredients and consumer-ready dairy products across a range of markets.

Combined with broader regional growth, higher export volumes and near-record export value, U.S. dairy continues to expand its role in international markets.

“Looking ahead, our industry is poised for even greater growth,” Dykes says. “A renewed trade agenda that expands market access, strengthens enforcement and opens new opportunities in Southeast Asia, Latin America, North Africa and the Middle East will allow U.S. dairy exporters to compete and win in markets around the globe.”

With momentum already built in 2025, the outlook for 2026 points toward continued export gains fueled by expanding opportunities.

New U.S.-Argentina Trade Deal Opens Door for Dairy Exports

Tue, 10 Feb 2026 16:40:24 GMT

A newly signed trade agreement between the U.S. and Argentina is creating new opportunities for U.S. dairy exports, with industry leaders pointing to meaningful progress on both tariff reductions and long-standing trade barriers.

The U.S. Dairy Export Council (USDEC), National Milk Producers Federation (NMPF) and Consortium for Common Food Names (CCFN) welcomed the U.S.-Argentina Agreement on Reciprocal Trade and Investment, finalized Feb. 5. The agreement includes specific provisions aimed at improving market access for U.S. dairy products while protecting the use of common food names that have become a growing point of contention in global trade.

As part of the deal, Argentina committed to eliminating tariffs that currently reach as high as 28% on select dairy products, including milk powders, dairy proteins, lactose and other dairy ingredients. The agreement also establishes a 1,000-metric-ton quota for certain U.S. cheeses entering the Argentine market.

In addition to tariff relief, the agreement addresses nontariff barriers that can complicate exports. Argentina agreed not to impose processing facility registration requirements on U.S. dairy plants and to provide explicit protections for 39 common cheese names, including Parmesan.

“The commitments secured in the U.S.-Argentina reciprocal trade deal bring new, real opportunities for our dairy exports to South America,” says Krysta Harden, USDEC president and CEO. “USDEC appreciates USTR’s (U.S. trade representative’s) hard work in securing agreements that lower tariffs and meaningfully address nontariff barriers, particularly those to protect common cheese names. We look forward to building our market presence in Argentina as the agreement is implemented.”

Beyond tariff and market‑access details, industry organizations say trade agreements such as this one can shape broader market conditions, including milk demand and longer‑term stability.

“Trade deals like this bring dairy farmers promise for the future,” says Gregg Doud, president and CEO of NMPF. “Dairy farms operate 365 days a year, and the U.S. negotiating team is keeping pace to secure new market access. NMPF will continue to work with the Administration as all the reciprocal trade agreements are translated into real results on the ground for our farmers.”

Protection of common cheese names was also a central priority for CCFN, especially as the European Union continues to pursue trade agreements that seek to restrict the use of terms U.S. producers consider generic.

“Argentina’s commitment to protect 39 common cheese names and 10 generic meat terms could not have come at a more important time,” says Jaime Castaneda, CCFN executive director. “As the European Union is advancing toward implementation of its trade agreement with the Mercosur bloc of countries, our ability to use common names is increasingly at risk. We cannot thank Ambassador (Jamieson) Greer and the USTR negotiating team enough for the foresight and leadership in protecting U.S. exporters’ rights.”

The Argentina agreement follows recent reciprocal trade deals the U.S. signed with El Salvador and Guatemala that also include commitments to prevent barriers to U.S. dairy exports.

USDA Trade Team Returns from Malaysia with a Focus on These Key Ag Products

Fri, 16 Jan 2026 13:39:24 GMT

As a follow up to the Oct. 26, 2025, trade deal announced by President Donald Trump, the USDA trade team just returned from a recent Trade Reciprocity for U.S. Manufacturers and Producers (TRUMP) mission.

Luke Lindberg, USDA undersecretary for trade and foreign agricultural affairs, says there were good, productive meetings toward elevating the relationship between the U.S. and Malaysia, which ranks as the 26^th largest ag trade market.

“These TRUMP missions were one of the aspects of [Agriculture] Secretary [Brooke] Rollins’ and my three-point plan to really ramp up U.S. agricultural exports. So, the president’s done a tremendous job of negotiating these new agreements around the world, and our job is to get on the ground with farmers, with U.S. agribusinesses, and start to make deals happen,” Lindberg says. “The analogy I’ve been using is the president is opening the door, and it’s our job to drive a bus through it.”

The trip to Malaysia had a delegation of 16 agribusinesses and trade associations. In recent years, the biggest U.S. agricultural exports to Malaysia have been soybeans, dairy products, cotton, vegetables and nuts.

“The whole barnyard kind of came with us this time around, because one of the things that the U.S. trade representative’s team and we did with USDA and the White House was we actually got Malaysia to agree that the U.S. food system is safe, and that’s in the language of the agreement,” he says.

Of the specific categories he shared, there was progress on many fronts including:

Soybeans — In 2024, Malaysia imported almost 452 metric tons of U.S. soybeans. Lindberg says U.S. leaders met with the largest soy crush facility, and he sees opportunities for growth.
Dairy — In total for 2024, Malaysia imported $118 million in dairy products. “We’ve seen a tremendous increase in dairy access and opportunities there, 23% growth this past year for dairy,” Lindberg says.
Ethanol — “We had a great conversation around ethanol opportunities,” Lindberg says. “Malaysia is a regional distributor of fuels, and so working ethanol into the fuel supply chain that can really spread throughout the ASEAN region, a lot of good opportunities out there.”
Beef — “We visited a very successful restaurant group in Malaysia that’s been begging for U.S. beef for a long time,” Lindberg says. “They’ve actually invested in a beef processing plant in the United States to get their beef halal certified so that they’re ready to go for when the actual duties shift and the regulations come into full force.”

Lindberg says a key tenant of the trade deal is to reduce or eliminate all tariffs.

“A lot of our producer groups haven’t been able to compete on a level playing field in Malaysia in the past, and now they have that access and that opportunity,” he explains. “When our groups can compete on a level playing field, I think we win more often than we lose.”

Next steps include a Malaysian delegation visiting Washington, D.C., next week.

“We’re marching forward here with a great opportunity on the horizon. I think it’s progressing nicely,” Lindberg says. “These rapid-response missions are largely driven by building these kind of new opportunities that really didn’t exist yesterday and exist today. In the next couple months, we’ll see full implementation of the deal, and that’ll really be the access-opening opportunity for our producers.”

Looking ahead this year, Lindberg says the USDA trade team is “hyperfocused” on fixing the agricultural trade deficit. With 2026 agribusiness trade missions announced for Indonesia, Philippines, Turkey, Australia and New Zealand, Saudi Arabia, and Vietnam, he highlights time spent in Southeast Asia is a strategy to build trade in a region with growing GDP and positive consumption trends for U.S. agricultural goods.

“It’s going to be a dynamic year for U.S. trade,” Lindberg says. “I keep saying to folks: Trade agreements are great, but sales are the goal.”

A New Dawn for U.S. Dairy: The Trade Breakthrough with Indonesia

Thu, 24 Jul 2025 16:05:25 GMT

The landscape of international dairy trade recently witnessed a significant milestone with the announcement of a comprehensive new trade framework between the United States and Indonesia. This landmark agreement promises to open new horizons for American dairy exports, signaling a new era of trade opportunities and partnerships in Southeast Asia.

Industry Leaders Applaud the Move
Several prominent dairy organizations, including the U.S. Dairy Export Council (USDEC), National Milk Producers Federation (NMPF), the Consortium for Common Food Names (CCFN), and Edge Dairy Farmer Cooperative have applauded this development. The agreement sets a powerful precedent by eliminating tariffs on the vast majority of U.S. exports to Indonesia and pledges to dismantle longstanding nontariff barriers that have previously hindered American dairy products from entering this thriving Asian market.
Gregg Doud, president and CEO of NMPF, expresses his optimism.

“This looks like it will be a significant win for U.S. dairy,” he states, emphasizing the potential benefits this deal brings for American dairy farmers and pointing out the significance of such an agreement in fostering trade growth in one of the world’s most populous nations.

“We are pleased to hear this framework removes roadblocks to trade and will help grow dairy sales in one of the world’s most populous markets. NMPF looks forward to reviewing the details of the agreement and working with the administration to ensure Indonesia upholds its end of the bargain,” he says.

A Fair and Transparent Approach to Trade
The framework has been outlined meticulously in a White House fact sheet, which highlights Indonesia’s commitment to removing tariffs on nearly 99% of U.S. exports. Additionally, the agreement includes recognizing U.S. regulatory oversight, listing all U.S. dairy facilities and implementing a transparent mechanism for handling geographical indications (GI) — a crucial element for the protection of common cheese names like Parmesan and feta.

Krysta Harden, president and CEO of USDEC, remarks on the crossroads this deal represents for U.S. dairy exporters.

“This deal is poised to strengthen our long-term partnership with Indonesia while giving U.S. dairy companies a better shot at competing fairly,” she says. “While verification that Indonesia honors its commitments will be necessary, the removal of both tariff and nontariff barriers is precisely what our industry needs to create new momentum for U.S. dairy exports and deeper collaboration with a key Southeast Asian partner.”

Commitment to Fair Practices and Common Names
Jaime Castaneda, executive director of CCFN, emphasizes how the significance of maintaining common food names in the global market cannot be understated.

“We commend the U.S. negotiators for prioritizing this issue, particularly at a time when European Union is attempting to expand their GI abuse in growing dairy markets and shut out the United States. We will work diligently with the U.S. government to hold Indonesia accountable to their commitments on common names,” he stated.

Moreover, the agreement signals a commitment to a fair and balanced approach to GIs — a move that is expected to resonate across global markets and aid in long-term sustainability and competitiveness for U.S. dairy.

A Bright Future for U.S. Dairy Exports
Heidi Fischer, Edge board president, expresses enthusiasm for the trade framework and its potential implications for U.S. dairy farmers. With expectations of improved market access in Indonesia, there is anticipation of a rise in global demand for American dairy products.

“We are encouraged by the trade framework between the U.S. and Indonesia and what it means for dairy farmers,” she said. “By improving market access in Indonesia, we hope to see a rise in the global demand for U.S. dairy products.”

Last year, the U.S. exported $246 million worth of milk powders, whey products, cheese and other dairy ingredients to Indonesia — cementing it as the seventh-largest U.S. dairy export destination. This agreement is set to complement ongoing initiatives by NMPF and USDEC to integrate school milk into Indonesia’s new Free Nutritious Meals program, fostering greater collaboration and cementing strong trade relationships.

As the U.S. dairy industry savors this momentous achievement, there is anticipation for the prosperous journey ahead, underpinned by shared growth and collective success in global markets.

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Dairy Exports Strong Despite Lingering Trade Negotiations

Tue, 22 Jul 2025 15:09:11 GMT

Recently, dairy has been a beacon of shining light when it comes to exports especially when looking at the massive trade deficit U.S. Agriculture is facing as reported by the USDA in the latest Outlook for U.S. Agricultural Trade. In 2024 alone, the U.S. dairy industry bolstered a $2.8 billion trade surplus. In 2025, as of the May U.S. Dairy Trade report rang in new records in cheese exports and strong gains in butterfat up 150% from this time last year. The USDA has forecasted an over $3 billion trade surplus for 2025 and it appears like we are on the right track to make that happen.

There are a few factors that have caused so much demand in U.S. cheese and butterfat products. Mainly, price is a huge determining factor. The U.S. is one of the most competitively priced products in the world right now. The U.S. is the lowest priced product among the top three dairy exporters, under the EU and New Zealand currently. Mostly because U.S. herds have chosen to cull fewer cows based on USDA slaughter data. This causes a surplus in butterfat availability or supply. There has also been a recent decline in usage in the United States, most notably in pizza sales resulting in a surplus of cheese available for export. On the other hand, the EU has struggled to maintain herd size, losing more than 700,000 head from 2023 to 2024 from varying factors but disease has been an issue.

This positive trade balance has not come without struggle. The recent trade negotiations with China have left a massive hole in Dry Whey product demand. India is in turmoil over proposed trade agreements and it makes one wonder what the U.S. dairy export program could have been without hostilities from the Asian market. China is the world’s number one dairy product importer and has been a long standing importer of U.S. Dairy products, accounting for a monthly total varying from 14 to 22% of export volume of U.S. dairy products. In the month of May, we saw low protein whey drop nearly 70% on volume shipped to China compared to May of last year. Skim solids and NDM have been hit hard. In 2024, China accounted for 43% of low-protein why exports alone and 14% of all U.S. dairy products exports.

India’s dairy farmers are concerned with negotiations as the proposed trade deal could lead to a drastic drop in milk prices and a surplus of product in their country. Protestors believe there could be as much as a 15% drop in local milk prices due to an increase in milk imports by over 25 million tonnes. While positive for the U.S. dairy, this is a major hold up of the U.S./India trade deal. India also sites help concerns over GMO’s being introduced to their market. The U.S. in turn has raised formal objections at the World Trade Organization over the dairy certification system India uses. The belief is they cause unfair and unnecessary trade barriers.

Another pain point for U.S. trade, Mexico saw a decline in demand, reducing purchases 12% year-over-year. But increases in cheese demand in Japan and South Korea have more than made up for the deficit.

The future of the U.S. dairy export program has a lot to look forward to. Despite hostile relations with some of our major consumers, we have managed to diversify our availability of markets, shipping more butterfat and cheese in history and to countries we have not seen this type of volume before. Should a trade deal with India or China be accomplished, we have a lot of look forward to but with an air of caution. The reward from high exports has been derived from low U.S. prices compared to the rest of the world and a surplus of whey with no demand is weighing on the farmer’s bottom line. Without a trade deal especially with China, we could see a drop in milk price due to a massive amount of low protein whey, clogging the pipeline with nowhere to go, caused by the huge production of cheese. Luckily, the U.S. dairy industry in innovative and much like us diversifying our exports to new frontiers when faced with the hurdle of trade wars, who knows what solution we will find to the looming whey problem.

Sarah Jungman is a commodity broker with AgMarket.Net and AgDairy, the dairy division of John Stewart & Associates Inc. (JSA). JSA is a full-service commodity brokerage firm based out of St. Joseph, MO. Sarah’s office is located in Winterset, Iowa and she may be reached at 515-272-5799 or through the website www.agmarket.net .

The thoughts expressed and the basic data from which they are drawn are believed to be reliable but cannot be guaranteed. Any opinions expressed herein are subject to change without notice. Hypothetical or simulated performance results have certain inherent limitations. Simulated results do not represent actual trading. Simulated trading programs are subject to the benefit of hindsight. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. There is risk of loss in trading commodity futures and options on futures. It may not be suitable for everyone. This material has been prepared by an employee or agent of JSA and is in the nature of a solicitation. By accepting this communication, you acknowledge and agree that you are not, and will not rely solely on this communication for making trading decisions.

Mexico Goes All Out to Grow Milk Production

Mon, 21 Jul 2025 16:00:00 GMT

Mexico has been trying to grow its dairy industry for years, with mediocre success. But the threat of 30% tariffs on top of a 10% base tariff appears to be the impetus the country needs to pick up its effort. That’s bad news for the U.S. dairy industry because Mexico is the largest foreign purchaser of U.S. dairy products, according to Sarina Sharp, analyst with the Daily Dairy Report.

“Mexico accounted for more than half of U.S. milk powder exports and more than one-third of U.S. cheese exports in 2023 and 2024. In each of the past three years, Mexico consumed more U.S. milk powder than the United States used domestically,” Sharp noted.

Amid uncertain trade relationships and food inflation, Mexico recently announced plans to spend $4.1 billion over the next five years to boost domestic milk production 13% by 2030. The country’s Ministry of Agriculture and Rural Development hopes domestic milk production growth will replace 30% of milk powder imports.

The ministry announced it will provide small- and medium-sized operations—97% of all operations—with subsidies, technical assistance, and infrastructure upgrades. Funding will also be provided to reopen and modernize dairy processing facilities. These new programs will be launched alongside the new Leche para el Bienestar, or Milk for Wellbeing, initiative. In this initiative, which is expected to benefit 7 million consumers this year alone, the government will directly purchase milk from producers in the poorest states and resell it to low-income consumers at a fixed price.

“Mexico will surely face some potholes on the road to self-sufficiency,” Sharp said. “Many nations, including the United States, have attempted to prop up small farming operations, but they’ve failed to forestall consolidation. In addition, Mexican processors will have difficulty competing on quality and cost by restoring manufacturing facilities that were mothballed decades ago.”

Even without government help, Sharp noted that Mexico’s dairy industry was expected to expand. According to a recent USDA Global Agricultural Information Network report, milk production in Mexico is expected to grow 1% this year compared to 2024 due to drought relief, less expensive feedstuffs, an expanding milk-cow herd, and continued consolidation. Since the report was published in May, Sharp added that drought conditions have improved and feed costs have continued to drop, indicating that growth in milk output could be even stronger.

“Even if Mexico’s milk production ambitions fall short, the focus on growth could have a significant impact on the U.S. dairy industry,” Sharp said. “For decades, a favorable trading relationship has cultivated a vital outlet for U.S. dairy output. But today, the relationship has started to sour, and the Mexican government is looking to replace American dairy with homegrown products.”

Trump's Aggressive Trade Agenda Is Back On

Thu, 29 May 2025 20:40:20 GMT

The interruption to President Donald Trump’s trade agenda was short lived.

A federal appeals court has now granted the Trump administration’s request to temporarily pause the Wednesday lower-court ruling that declared an emergency law does not provide President Trump with unilateral authority to impose tariffs on nearly every country — a decision that would have blocked reciprocal tariff announcements dating back to February.

The original ruling was issued by a three-judge panel at The U.S. Court of International Trade. The judges said the sweeping tariffs and other global levies imposed under the International Emergency Economic Power Act were unlawful, which invalidates President Trump’s April 2 reciprocal tariff order. That order included 30% tariffs on Chinese imports, 25% tariffs on select goods from Mexico and Canada, as well as a blanket 10% tariff on most imported goods.

The Trump administration then filed a notice of appeal, which was granted on Thursday by a federal appeals court. The pause gives the Trump administration some additional time to prepare to argue the law empowers the president to unilaterally launch a global tariff strategy.

Before the appeal was announced, White House Press Secretary Karoline Leavitt slammed the U.S. Court of International Trade ruling on Trump’s tariffs. Leavitt said the judges were “overstepping their bounds.” You can listen to her comments below.

How could this ruling potentially impact trade? We asked Alan Brugler of Brugler Marketing that question before the appeals court weighed in. He says to answer that, you first need to ask two main questions.

“In the short run, not much. You have to assume the administration is going to appeal the ruling and the question is going to be ‘Will the appeals process result in a stay, either freezing the tariff implementation or allowing it to continue during the appeal process?’ That’s the first question,” Brugler says.

Brugler says his second question is how this could impact current trade negotiations. Just last week, treasury secretary Scott Bessent said he expects several large trade deals to be announced in the next couple of weeks.

“What does it do to the administration’s leverage on the deals that they said we were coming close to,” Brugler adds. “The EU is one example. For now, I think we have to take it with a grain of salt. We also need to remember that it does not affect some of the tariffs, such as the aluminum and steel. Those were implemented under a different section of law that had been used back in the 2017 and 2018 era. Those are still in place. So, it does offer some potential for a lot less aggressive tariff war. But again, this is probably just the first step in the overall process.”

Mike North of Ever.Ag doesn’t think this gives President Trump’s administration less leverage. Instead, he chalks up the ruling to the ongoing theme of federal courts trying to overturn any major action Trump tries to take.

“I think as you look at the landscape, he’s come into office very aggressively — trying to enact very quickly the promises he made in his campaign. Ultimately, as you look at the flow of things, we had to expect the court was going to weigh in on this tariff discussion at some point. There hasn’t been a thing he’s done that hasn’t resulted in some form of a lawsuit, court order, court filing, judgment or otherwise. This is just the natural next step in this discussion,” North says.

North points out there are ways to differentiate how President Trump can leverage this, specifically referencing the 1974 Trade Act.

“That ultimately has many parts and pieces to it, and to Alan’s point, allows him to take a lot of different angles here. So, I don’t think anything that’s come out over the last couple of days on this discussion is really going to change the course of much of anything — at least in the short run,” North says.

What is the U.S. Court of International Trade?
If you’ve never heard of the U.S. Court of International Trade (CIT), you aren’t alone. CIT is based in New York, and its purpose is to resolve disputes between governments, manufacturers, trade associations and other parties that may be privy to trade dealings.

According to the Court’s website, “from the time of its establishment, the United States Court of International Trade and its predecessor bodies have been designed to provide a comprehensive system for judicial review of civil actions arising out of import transactions and federal transactions affecting international trade.”

Mark A. Barnett, chief judge at CIT, says, “As the impact of international trade on the U.S. economy has expanded, there has been a corresponding increase in international trade disputes — involving governments, foreign and domestic manufacturers, workers’ unions, trade associations and individuals — and a continued need to provide consistent, fair and impartial adjudication of these disputes. While the nature of these disputes shifts between classification and valuation, unfair trade practices and various types of enforcement measures, the United States Court of International Trade continues to strive for the just, speedy, and inexpensive determination of every action and proceeding brought before it.”

Milking New Opportunities: U.S. Dairy Gains Market Access in Costa Rica

Wed, 28 May 2025 18:51:03 GMT

Under the leadership of U.S. Secretary of Agriculture, Brooke Rollins, the American dairy industry is celebrating a significant milestone as Costa Rica approves the first U.S. dairy facility under a new streamlined approval process. This progressive step is expected to enhance market access for U.S. dairy producers, signaling a positive trend in dissolving non-tariff barriers, a commitment upheld by the Trump administration.

Farmers First: Securing a $130 Million Market
With President Donald Trump’s administration emphasizing the “Farmers First” approach, Rollins lauds the achievement as a crucial victory for American dairy farmers. The newfound market access in Costa Rica opens a $130 million opportunity, paving the way for the U.S. dairy industry to expand its reach. Reflecting on this progress, Rollins expressed optimism about continuing efforts to dismantle trade barriers and unlock global markets for farmers and ranchers.

Streamlined Process: A Win for Collaborative Efforts
On May 22, Costa Rica’s National Animal Health Service (SENASA) granted official approval to the first American dairy cooperative for export, making it the inaugural U.S. facility under the reformed, simplified approval process. This development marks a key victory for the ability of U.S. dairies to meet the growing demand in Costa Rica, ensuring relationships and exports are not hindered by outdated processes.

USDA, in collaboration with SENASA, agreed on a streamlined registration protocol for U.S. dairy facilities. This move replaces the previously cumbersome and lengthy registration, which has historically been a hurdle. The successful transition was detailed in a USDA report published on May 23.

Building Bilateral Relations
The reflection of positive bilateral engagement between the U.S. and Costa Rica is celebrated by Krysta Harden, U.S. Dairy Export Council president and CEO. Her acknowledgment praises the partnership that fosters exportation of high-quality U.S. dairy products. Under the framework of the Central America-Dominican Republic Free Trade Agreement (CAFTA-DR), all dairy tariffs have been brought to zero, presenting compelling opportunities for U.S. exporters.

“We are proud of supporting the great work of the USDA Foreign Agriculture Service, USDA’s Agricultural Marketing Service, Food and Drug Administration and U.S. Trade Representative’s Office to painstakingly reach an understanding with Costa Rica to facilitate the export of high-quality U.S. dairy products,” Harden said.

Gregg Doud, president and CEO of the National Milk Producers Federation, highlights the important breakthrough facilitated by USDA and SENASA. The newly simplified process not only solidifies the trade partnership but also capitalizes on the zero-tariff environment beneficial for U.S. dairy exporters.

“Costa Rica is an excellent trading partner, due in major part to the successful U.S.-Central American Free Trade Agreement. This breakthrough between USDA and Costa Rica’s National Animal Health Service further cements that relationship and builds on the zero-tariff trading conditions for dairy exporters that began this year,” Doud said.

The successful outcome of this streamlined approval effort is a testament to years of dedication by USDEC’s Market Access and Regulatory Affairs team, in concert with the USDA Foreign Agricultural Service and the Costa Rican authorities. After extensive evaluation, SENASA concluded its review in 2025, approving the first U.S. dairy facility under the new protocol.

Prospects for Future Growth
As Costa Rica’s economy strengthens and its middle class expands, so does its demand for dairy. The improved access for U.S. exporters aligns with the increasing market needs, promising a vibrant future for both U.S. and Costa Rican dairy sectors. This development heralds a promising era for U.S. dairy, where breaking traditional trade barriers refuels the commitment to making agriculture great and global again.

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Global Cheese Appetite is Powering Growth for U.S. Dairy

Wed, 21 May 2025 19:27:56 GMT

William Loux, senior vice president of global economic affairs for the National Milk Producers Federation (NMPF) and the U.S. Dairy Export Council (USDEC), says the dairy industry is finally turning a corner. After years of market volatility, he sees growing stability on the farm and rising international demand, especially for cheese and dairy proteins, as encouraging signs of progress.

“I’m pretty optimistic about [the state of the dairy industry],” Loux says. “I’m not always the optimistic person as the numbers guy, I kind of give the ‘real’ talk, but in general, profitability on the farm looks good, and we’ve got a situation where demand, especially internationally, is starting to recover.”

He shared these insights in a recent appearance on “AgriTalk” where he discussed the current state of U.S. dairy and what is driving renewed optimism across export markets.

Cheese is Leading the Charge
While domestic cheese sales remain soft, global cheese demand is accelerating rapidly. Much of that growth is coming from international restaurant menus that are incorporating cheese in new and creative ways.

“I think a lot of that goes to work that the export council has done,” Loux says. “We have a whole cheese marketing program as part of that group internationally. And you can look at [these restaurants] adapting their menus to local tastes, but I think the big success that we’ve also had, for example in Korea, is looking at traditional restaurants, like Korean barbecue, that now has cheese dips as offerings at many of those restaurants. So it’s not just the U.S. coming in and saying, ‘here’s our [restaurant] companies, how do you adapt it.’ It’s the local companies that are also seeing opportunities [to add dairy].”

Loux says this growth in demand is broad-based and happening faster than before the pandemic.

“Over the last 12 months, 12 out of the top 13 global cheese markets have all increased their demand, and that is unusual,” he says. “We are growing at twice the speed we were pre-COVID. The U.S. is the one benefiting here first and foremost, we are growing faster than any other exporter in the world, but we aren’t the only ones. New Zealand and Australia both had record years, Europe is growing, too, so the competition isn’t evading. But at the same time, this demand is a bright spot for global dairy prices. We are seeing good cheese demand [internationally], which we desperately need right now, and that is a positive signal for dairy.”

Beyond cheese, other dairy products are gaining traction in international markets as well. Whey proteins and milk proteins, in particular, are seeing increased demand across Asia. Still, Loux acknowledges the market is mixed.

“When you look outside of the cheese market at everything else, non-fat is a little soft; dry whey — we have some trade issues with China,” he says. “But I look at this market and say, hey, we are finally starting to turn the corner on some of this global demand. There are plenty of risks ahead, but I look at the state of the industry and say that we’ve weathered through some pretty tough times, especially in 2023 and into 2024, and now I think with the capacity, there is a great opportunity for U.S. dairy moving forward.”

Exports as a Balancing Act
Exports play a crucial role in stabilizing and expanding the U.S. dairy industry. Loux points to two key advantages that exports provide.

“First off, it brings balance to your milk check,” he says. “Fundamentally, even as we see higher butterfat in our components, we’re not making pure cream out of the cow. So, we have to find opportunities to grow our skimmed side, and that’s our proteins and caseins. And internationally, folks are demanding more of that and are asking for it — 75% of our nonfat dry milk and 50% of our dry whey goes overseas. And we fundamentally need that to keep our prices balanced.”

Loux also sees exports as a vital engine for long-term industry growth.

“Over the last number of years, the U.S. has increased its cheese exports more than we have increased our domestic cheese consumption,” he adds. “Mexico in particular has been an incredibly strong cheese market for us over the last number of years, but even as they’ve slowed down, because we’ve emphasized being in multiple markets, particularly in Asia and elsewhere, U.S. cheese exports are still on pace for another record year.”

Much of this momentum is tied to protein’s growing popularity worldwide. Once limited to sports nutrition and infant formula, dairy proteins are now appearing in everyday products such as cookies and soups in Japan, signaling a broader shift in consumer demand across global markets.

Expanding Access into the UK
Following the recent announcement of a trade agreement between the U.S. and the United Kingdom, there is cautious hope for increased dairy exports to the region. But Loux urges a measured outlook.

“Right now, not a whole lot has actually been completed,” he says. “When we look at reading the fine print, it really looks like they’ve only agreed to keep talking, and I think they’ve avoided some of the tariffs within the reciprocal agreement. So, we aren’t seeing much access for dairy yet.”

Despite the lack of movement, Loux points out the UK does present significant potential for U.S. dairy exports, as it is the largest cheese-importing country in the world. However, roughly 90% of those imports come from European suppliers.

“As we look at opportunities, the UK buys, imports and eats a lot of cheese,” Loux states. “But they also need proteins, and that’s what the UK wants. And the U.S. is the fastest growing exporter of that product.”

Loux says that if a formal agreement can be reached, the U.S. dairy industry stands to benefit. Still, it all depends on the final details.

“We need to wait to see the fine print and figure out what this deal actually looks like,” he adds.

Tariffs: Short-Term Pain or Long-Term Gain?
When it comes to tariffs, Loux sees them as a necessary part of the conversation, but not a long-term solution.

“I’ll be honest with you, I’m a free trader,” he says. “I’m a fan of exports, but I’m also a fan of consumer choice. At least as it comes to within the U.S. and everything else, I’m fine with Kerrygold or whatever being on the shelves. But I also want the U.S. [dairy] to have access to Irish shelves, right?”

Lack of reciprocal trade, particularly with Europe, remains a major concern for Loux. In some cases, such as retaliatory tariffs on European butter and cheese, there might be justification. But Loux warns that blanket tariffs can have unintended consequences on consumer behavior and the broader economy.

“Ten percent tariffs certainly do have an inflationary aspect to them, and I think that is the risk,” he says. “I’m not going to get too much into the macro side, but if you see U.S. consumers stop going out to eat as much because they’re just in a worse financial position, that’s a risk for dairy markets.”

Rather than more tariffs, Loux advocates for trade agreements that promote open access and growth.

“What we’ve always advocated for in international markets is twofold,” he states. “When we go and have agreements with places like Korea or Japan or Central America, our argument is usually that lower tariffs actually can grow demand overall and benefit both the local industry as well as U.S. dairy exports. And as we look at this internationally, that’s where I’d like to see lower tariffs, not more tariffs. I want more demand and consumption for everybody.”

For Loux, the goal is simple.

“From an economic perspective, I kind of want more demand and more consumption for everybody,” he says.

Trade to India Remains Out of Reach
Recently, India has dominated the conversation when it comes to global trade. However, Loux believes U.S. dairy trade with the country will likely remain out of reach.

“It comes up in every trade conversation, and I think it is probably the most asked question, or most asked country I get asked about,” Loux says. “It’s the biggest dairy consumer in the world. It would make sense as an opportunity for U.S. dairy.”

But despite the sheer scale of potential demand, the barriers remain firmly in place.

“Between the non-tariff barriers and the political sensitivity around dairy, I have no expectations that we’re getting any sort of real access into India,” he explains.

This isn’t a new struggle.

“We have tried for 20 to 30 odd years to get access into India,” Loux adds. “The Kiwis have tried for 20 to 30 years to get access into India. Canadians, too. So far, no one has.”

He remains skeptical about any breakthroughs on the horizon.

U.S. Dairy Remains in a Strong Position
While dairy has certainly seen its fair share of challenges throughout 2025, Loux is encouraged by where U.S. dairy stands today. After years of volatility, he sees signs of recovery, especially as global demand for cheese and proteins gains momentum.

While hurdles like tariffs and trade barriers remain, Loux believes U.S. dairy is well-positioned for growth. He points to recent export success, expanding opportunities in markets like the UK, and the industry’s ability to adapt to shifting global demand.

Challenges with countries like India persist, but Loux is confident that with continued focus and smart trade strategy, U.S. dairy can keep gaining ground worldwide.

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The Path to Fair Trade: The Emerging U.S.-UK Dairy Agreement

Fri, 09 May 2025 18:07:32 GMT

The prospect of a U.S.-United Kingdom (UK) trade agreement has been long overdue, particularly in the dairy sector. This new framework for negotiations marks a crucial turning point as the U.S. seeks a level playing field with global dairy exporters.

Current Trade Imbalance
According to Gregg Doud, president and CEO of the National Milk Producers Federation, achieving a robust trade agreement with the UK is a vital step in correcting the current imbalances in the dairy trade. While the U.S. has heavily invested in its dairy processing capacity, amounting to more than $10 billion, it faces considerable challenges in accessing the UK market.

The trade disparity between the U.S. and the European Union (EU) is particularly stark. The U.S. imports $3 billion worth of dairy products from the EU yet exports a mere $167 million. This imbalance is underscored by the fact that U.S. cheese exports to countries like Guatemala significantly outpace those to the EU.

“It is an outrageous imbalance. We actually export 15 times more cheese to Guatemala than we do to the European Union,” Doud points out. “The United States and the United Kingdom are long overdue to strike a deal on trade. This agreement on a solid framework for negotiations over the coming months is an important step in the right direction.”

Strategic Importance of New Agreements
U.S. dairy products face additional hurdles in the UK market due to the EU’s duty-free, quota-free access and geographical indications that limit competition. Furthermore, the recent free trade agreements with New Zealand and Australia, set to eliminate UK dairy tariffs over five years, further complicate the landscape for U.S. exporters. These agreements allow competitors to access the UK market more freely, deeming their products “low risk” and certification-free.

Krysta Harden, president and CEO of the U.S. Dairy Export Council (USDEC), emphasizes the need for U.S. dairy exporters to gain similar advantages.

“Yesterday’s announcement of a U.S.-UK agreement on a negotiating framework for trade must be a first step in the work that’s needed to open market opportunities for U.S. dairy products to the UK, which imported $5 billion from the world last year,” she said. “The UK already has open trade with the world’s largest dairy exporter, the EU, and it will have fully open trade with two of the other largest exporters, New Zealand and Australia, in just three years. Duty-free, quota-free, certificate-free trade is what U.S. dairy exporters need to have a level playing field in this key market.”

The U.S.-UK framework for trade negotiations represents an important first step toward leveling the playing field for U.S. dairy products in the international market. With significant investments and a robust dairy processing capacity, the U.S. stands poised to enhance its global footprint, provided it navigates the challenges of fair market access. As negotiations progress, the goal remains clear: achieving a balanced, competitive trade environment that benefits U.S. dairy exporters and sustains industry growth.

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Promising Potential? Why India Poses the Biggest Opportunity for Trade, But Also the Biggest Challenge

Wed, 23 Apr 2025 15:45:47 GMT

As trade tensions continue to impact both commodity and financial markets, the White House says the Trump administration is making progress on additional trade deals. The news comes as Vice President JD Vance was in the middle of a four-day visit to India, with both countries saying they had made progress in negotiating a bilateral trade deal. Delhi hopes this deal will help it avoid higher tariffs.

Vance announced the U.S. and India have “officially finalized the terms of reference for the trade negotiation.” He called it a “vital step,” saying it sets a roadmap toward a final deal.

India is just one of several trade deals in the works, according to the Trump administration. White House press secretary Karoline Leavitt said on Tuesday the Trump administration now has “18 proposals on paper” for trade deals.

“You have Secretary Bessent, Secretary Lutnick, Ambassador Greer, NEC Director Hassett and Peter Navarro, the entire trade team meeting with 34 countries this week alone,” Leavitt said in the press briefing. “We are moving at Trump speed to ensure these deals are made on behalf of the American worker and the American people.”

Leavitt also announced “the president and the administration are setting the stage for a deal with China.”

The Wall Street Journal reported the White House is considering slashing tariffs in order to de-escalate the trade war. Currently, tariffs are at 145%, but the White House isn’t considering cutting those to zero. Instead, the Wall Street Journal reports those tariffs will likely fall anywhere between 50% to 65%.

However, Treasury Secretary Bessent declined to comment on that report, saying there’s no unilateral offer from President Trump to cut tariffs on China. He also said it could take two to three years to reach a full trade deal with China.

Progress With India
Before the White House’s 90-day pause on higher tariffs for other countries expires on July 9, India is one country rushing to negotiate a trade deal with the U.S.

Just this week, Vance and Prime Minister Modi announced the t erms of reference for a bilateral trade agreement between the U.S. and India. The progress toward the agreement was a result of the meeting between the two this week.

“I am pleased to confirm that USTR and India’s Ministry of Commerce and Industry have finalized the Terms of Reference to lay down a roadmap for the negotiations on reciprocal trade,” Greer said. “There is a serious lack of reciprocity in the trade relationship with India. These ongoing talks will help achieve balance and reciprocity by opening new markets for American goods and addressing unfair practices that harm American workers. India’s constructive engagement so far has been welcomed and I look forward to creating new opportunities for workers, farmers and entrepreneurs in both countries.”

During Vance’s speech in Jaipur prior to that, he said that the two countries had finalized the terms of reference for the negotiation.

“This is a vital step toward realizing President Trump and Prime Minister Modi’s vision because it sets a roadmap toward a final deal between our nations,” Vance said.

India’s Tariffs on U.S. Agriculture Products
India’s tariffs on U.S. agricultural goods are significant, which is a major point of contention in the U.S. and India trade relationship. Walnuts, for example, face a tariff of 100% into India. Vegetable oils have a tariff of up to 45%.

The United States has one of the lowest average applied tariff rates on agricultural products. But many of our trading partners maintain prohibitive tariff rates that constrain export opportunities for American farmers and ranchers.

Unfair and non-reciprocal practices have… pic.twitter.com/mmy5spBEzl
— United States Trade Representative (@USTradeRep) April 23, 2025

The U.S. argues these tariffs are unfair trade barriers, and Mark Knight of Farmer’s Keeper Financial told AgDay the U.S. relationship with India over the years has been complex and strange.

“Sometimes it’s friendly, for the most part. But that’s a giant population, and it would go a long way toward making a potential deal with China less important if we could strike some deals with some of these other countries — especially India. We haven’t had something in place with India for years.”

India Has the Most Potential, But Poses the Biggest Problem
If you want to understand just how problematic India has been for trade in the past, just talk to Gregg Doud. He’s the current CEO of National Milk Producers Federation (NMFP) but served as the chief ag trade negotiator during the first Trump administration.

During an episode of “Unscripted” earlier this year, he said India has the most potential, but is the biggest problem.

Doud says history shows you India has been a problem, as the U.S. essentially kicked India out of the World Trade Organization (WTO) in the past. The U.S. did finally agree to allow India back into the WTO, but under certain terms.

“I don’t want what I’m about to say to be seen as being negative toward the discussion between Modi and President Trump earlier this year, but one of the wins we did get in agriculture — which is my understanding based on some conversations — is that India lowered the tariff on U.S. bourbon from 150% to 100%,” Doud says.

He says while that may not have been the only win, it serves as an example for how difficult it is to negotiate with India.

India is a big customer of one main U.S. ag product, though: almonds .

In the 2023/24 crop year, the U.S. exported over 400 million lb. of almonds to India, making it the largest export market for California almonds. This was a 21% increase compared to the previous year. India’s almond imports from the U.S. were valued at $932 million in FY 2023.

India is the United States’ top buyer of almonds.

(U.S. Almond Board )

Doud says India has high tariffs to protect their own farmers.

“Think of it as a half billion farmers in India whose electricity, water, fuel, fertilizer and seed is all subsidized. India wants to keep that out in the country, and if we do anything that drives rural Indian folks into the cities, it would overwhelm them. This is the mindset,” Doud says. “I remind people, it was 5 or 6 years ago that India made a modicum of reforms of their domestic agricultural markets. There was so much unrest over those changes that Modi agreed upon to make, that three years later, they had to repeal the law.”

India’s Tariffs Crushed Apple Exports
U.S. apples are one commodity that has suffered from India’s retaliation in 2018.

“In 2018, India was the No. 2 market for U.S. apples until their retaliatory tariffs crushed our exports to near zero. They are rebounding back, but it might take years to return to the previous levels,” says Jim Bair, president and CEO of the U.S. Apple Association, in an interview with Farm Journal’s The Packer. “If the White House can facilitate that in a trade agreement with India, U.S. Apple wishes them Godspeed, and not a moment too soon.”

U.S. Apple says in 2018, India was the number two market for U.S. apples until retaliatory tariffs crushed their exports to near zero.

(U.S. Apple Association )

Potential With India
As the world’s most populous country, India holds massive potential if a trade deal can be struck. It boasts one of the fastest growing economies in the world with households that are seeing a high levels of consumer spending. That means agricultural products would be more accessible to a larger number of people.

According to USDA , top agricultural prospects for U.S. exporters include:

Cotton
Dairy products
Ethanol
Fresh fruit
Forest products
Processed food and beverages
Pulses
Tree nuts

USDA says in FY 2023, India imported $37 billion of agricultural and related products from across the world, with imports up 51% over the past five years.

“Proportional to its population, India imports a relatively small value of products. Comparatively, China, a country with a similar population size, imported $262.7 billion during the same period. Currently, India ranks behind much lower population countries like Canada and South Korea in total agricultural and related imports. This relatively low level of imports suggests good opportunities for future growth,” the USDA report stated.

Much of the recent growth of imports in India is with vegetable oils, which is the country’s top imported ag product.

USDA says imports of vegetable oil increased by $9 billion, nearly doubling in 5 years, to a total of $18.4 billion in FY 2023.

The United States has occasionally been a supplier of soybean oil to India, but imports face stiff competition from other substitutable oils like palm and sunflower, and from imports from India’s traditional soybean oil suppliers: Argentina and Brazil.

Butter from India Could Displace U.S. Butter

Thu, 17 Apr 2025 18:38:44 GMT

India, the world’s top milk-producing country, is home to four times as many people as the United States and nearly seven times as many cows. The country is the world’s largest butter producer, and a recent Global Agricultural Information Network (GAIN) report predicted that Indians would consume 7.1 million metric tons of butter in 2025. That’s nearly four times as much as second-ranked Europe, noted Sarina Sharp, analyst with the Daily Dairy Report.

“India’s butter output outpaced its colossal 2024 consumption and is expected to do so again this year, thanks to successful efforts to boost Indian milk output. India’s butter surplus has dragged down prices and boosted exports,” Sharp said. “The country’s butter values slumped to multi-year lows in early 2024, making domestic butter far cheaper than product from traditional exporters, including Europe, New Zealand, and the United States. Bargain pricing prompted a surge in international sales.”

Last year, India sold 55,000 metric tons of butter abroad, its highest volume ever, and exports remain strong in 2025. The uptick in India’s butter exports has helped the country’s butter market rebound from last year’s lows.

“While Indian butter is still significantly less expensive than butter from New Zealand and Europe, the weaker dollar and setback in U.S. prices have also given American butter an advantage in some markets. But the presence of Indian butter, an affordable alternative, on world markets could keep pressure on U.S. butter prices, which have also been weighed down by overproduction,” Sharp said.

While India is gradually becoming an exporter of butter, its dairy industry remains highly protected, Sharp noted. India’s policy restrictions and high tariffs limit the ability of the U.S. dairy exporters to increase market share in the country.

Albumin and lactose are among India’s top dairy imports, and they have been increasing significantly in recent years. These dairy ingredients are used primarily in manufacturing of non-food applications, such as pharmaceuticals and dietary supplements, according to the Indian Times. U.S. dairy exports to India consist mostly of milk whey, albumin, and lactose.

In late May, an Indian trade delegation will travel to the United States to continue negotiations on a bilateral trade agreement between the two nations. However, a significant easing of India’s dairy protectionism is unlikely. Top policymakers in India have recently voiced concern that easing or eliminating import restrictions on dairy could disrupt the financial well-being of its 80 million farmers.

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U.S. Unlikely to Capitalize on Dairy Demand Growth in China

Fri, 11 Apr 2025 20:09:15 GMT

President Donald Trump’s trade war with China ramped up this week, with both Trump and China President Xi Jinping refusing to yield. Trump and Xi appeared to be willing to climb the tariff ladder together, with no ceiling in sight, but then Xi announced Friday, after raising tariffs again, that they were as high as they would get. He made it clear, though, that he wasn’t backing down and that tariffs were already high enough to make U.S. products unmarketable in his country. Chinese importers of most U.S. goods will be required to pay a 125% tariff, while U.S. importers of most Chinese goods will be stuck with 145% duties.

The escalation of the trade war will basically lock the U.S. dairy industry out of the Chinese market for now, just when demand for dairy is expected to increase and milk production continues to fall, said Betty Berning, analyst with the Daily Dairy Report. China is the U.S. dairy industry’s third largest market by value, accounting for 7% of total dairy exports last year.

In February, milk production in China fell for the seventh straight month. CN Agri data showed that milk collections were 6.1 billion pounds in both January and February, with year-to-date output down 9.2%, compared to January and February 2024. Despite falling milk production, milk prices in China also fell, down 15 % in February relative to February 2024, according to RaboResearch. And skim milk powder production in January and February plummeted more than 30% compared to the same months in 2024.

“In 2018, China announced a modernization plan to increase milk production across the country and reduce its dependency on dairy imports,” Berning noted. “From 2018 to 2023, volumes grew rapidly, up 27%, or 24.7 billion pounds, and, by all accounts, the effort was a success. However, the nation has also sought to increase dairy consumption, but that endeavor has been less successful.”

According to Italy’s CLAL, China’s per capita milk consumption in 2023 was 25.6 lbs. “That is woefully less than per capita consumption in the rest of the world,” Berning said. “Growth in dairy consumption in China has not kept pace with gains in milk production. But in mid-2024, an oversupply of milk pushed prices lower, and the industry began culling cows, widening the gap between consumption and production.”

Consumption growth in China has been slow for several reasons. First, Berning said, many Chinese are lactose intolerant, which is why milk historically has not been a staple of the Chinese diet and why adoption is slow.Second, demand for infant formula has fallen due to declining birth rates, and the retail cost of dairy is also a factor in China’s volatile economy.

“Less milk from China seems likely to continue, at least for now. If dairy consumption takes off as Beijing hopes, more imports will be required until the country’s domestic supply can rise to meet demand. However, due to escalating tensions between the United States and China, these products would likely come from countries that China has a free trade agreement with—not from the United States,” she said.

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Trade Turbulence Could Shake Up Dairy Exports to China

Thu, 10 Apr 2025 19:27:31 GMT

Ongoing trade tensions and tariff negotiations between the U.S. and China are beginning to impact dairy markets, particularly for dry whey, whey permeate and lactose — products in which the U.S. is a leading global supplier.

More than half of U.S. dry whey and lactose production is shipped overseas, with China standing out as the largest buyer. But as trade disputes intensify, concern is growing that China might look elsewhere to meet its demand.

A Quick Tariff Recap
On April 2, President Donald Trump announced a new 34% tariff on goods imported from China into the U.S. Since then, that rate has increased to 84%. In response to the hike, China imposed a 34% retaliatory tariff on U.S. products entering the Chinese market.

But the back-and-forth retaliations didn’t end there. On April 9, the U.S. introduced further changes, announcing a 90-day pause on new tariffs for all countries except China, during which a universal 10% tariff would apply. However, for Chinese goods, tariffs are expected to increase to 125%.

U.S. Exports of Lactose and Whey
In 2024, the U.S. exported 409,000 metric tons (mt) of lactose, about 58% of the global market, according to a recent report from Rabobank. Of that, 110,000 mt were shipped to China, which accounted for 43% of total global lactose imports. In comparison, the European Union and United Kingdom combined exported only 33,000 mt of lactose to China.

While recent retaliatory tariffs are likely to put a dent in U.S. lactose exports to China, some volume may remain competitive. U.S. lactose is priced significantly lower, averaging around $834 per metric ton, compared to European prices, which range between $1,183 per metric ton and $1,918 per metric ton. Even with tariff retaliations, U.S. lactose could still offer better value in some segments when compared to the EU.

“The intensifying trade conflict between these two major trading partners could lead to shifts in lactose and whey trade, with potential export opportunities for Europe, Oceania and South America,” says Mary Ledman, global sector strategist for dairy at Rabobank.

“However, due to its competitive pricing, some U.S. lactose will likely still find a market in China. U.S. dry whey and permeate exports to China, on the other hand, are likely to fall significantly, with domestic U.S. prices for these commodities also declining,” Ledman says. “The trade war could result in lower prices for U.S. dairy producers, slimmer margins for traders and higher prices for Chinese end users and consumers.”

Phil Plourd, head of insights at Ever.ag, notes U.S. dairy exporters are already on edge.

“China takes a lot of U.S. whey products — dry whey, whey protein concentrates, permeate, lactose,” he says. “U.S. manufacturers and marketers had to be plenty concerned with the initial 34% levy announced by China late last week. Today, we’re up to 84%, which only makes things more challenging.”

Still, he acknowledges that the situation remains fluid, and both sides could be looking for ways to adapt.

“Even so, as is likely to be the case with many commodities and many countries, buyers and sellers are going to have to figure some things out,” Plourd says. “Do buyers have many immediate alternatives? Do sellers? Have buyers front-loaded, buying time for both sides to see how the dust settles? Over the short run, the unfolding actions aren’t a positive for prices. But it’s still early in this whole process.”

Will History Repeat Itself?
During a similar trade dispute in 2019, when China imposed a 25% tariff on U.S. whey products, U.S. exports of dry whey and permeate to China declined by 55%, and domestic prices fell by more than 35%. Lactose exports fell 33% during the same time period.

“When China implemented its 25% retaliatory tariff on U.S. imports in 2019, the U.S. dry whey market felt the brunt of this retaliation,” Ledman says. “At the time, China was also dealing with declining swine production due to an outbreak of African swine fever, resulting in lower whey and lactose exports to China for animal feed.”

However, with current tariffs now significantly higher than 2019, Ledman believes market pressure could be even more pronounced in the months ahead.

“RaboResearch expects the U.S. dry whey and corresponding milk markets to respond similarly to China’s new retaliatory tariffs in 2025, with the potential for more downside risk, given that the tariff is more punitive, totaling 36% as of April 10, and because the U.S. is experiencing an increase in production due to expanding cheese and whey production capacity.”

More Ripple Effects Likely to Come
As global trade flows adjust, there might be opportunities for Europe, Oceania and South America to expand their presence in the Chinese market. However, a mix of costs, product quality and supply constraints make this far from guaranteed.

In the meantime, the U.S.-China trade conflict adds another layer of uncertainty to global dairy markets.

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Declining Dollar Could Boost Dairy Exports

Fri, 21 Mar 2025 12:18:00 GMT

As the value of the U.S. dollar falls against other currencies, dairy products could become more competitive in world markets and help boost exports somewhat—despite retaliatory tariffs.

“The sanity of market analysts has not been the only casualty of this year’s flurry of government activity and trade war threats. The U.S. dollar has also taken a hit in recent weeks,” said Monica Ganley, analyst with the Daily Dairy Report and principal at Quarterra, an agricultural consulting firm in Buenos Airies.

“The news isn’t all bad for the U.S. dairy industry, though, because a weaker dollar will also render U.S. dairy exports more affordable for foreign buyers, who will have to shell out less of their own currency to buy product priced in dollars,” Ganley said. “This dynamic could provide a competitive boost to U.S. exports and help counteract the negative impacts of retaliatory tariffs,” Ganley said.

Published by the Intercontinental Exchange, the U.S. dollar index, which measures the value of the U.S. dollar against a basket of other currencies, rose in the final months of 2024. In early January, the U.S. dollar index hit 109.6. But since then, the index has lost 5.7% of its value— the worst performance for the beginning of any year since the Global Financial Crisis in 2008, Ganley said.

“The value of the dollar has fallen because investors have eschewed the currency in favor of what they view as more stable alternatives, such as the euro. Extreme political uncertainty, punctuated by escalating trade conflicts, has increased the likelihood that the U.S. economy will enter a recession this year. If that occurs, the Federal Reserve will almost certainly lower interest rates to spur additional economic activity. Lower interest rates mean that returns for investors who hold U.S. dollar denominated debt will decline, pushing them toward more attractive investments.”

These and other macroeconomic factors have weighed on consumer confidence, which could lead to a slowdown in spending. Retail sales rose 0.2% in February after declining 1.2% in January, according to the U.S. Census Bureau.

“While a positive reading on retail sales was welcome news, the modest result suggests consumers are proceeding cautiously. A weak dollar will further undermine the purchasing power of American consumers who buy imported goods, which could push the economy into a recession if consumers stop buying,” Ganley said.

Even if exports are boosted by a declining dollar, about 84% of U.S. milk production is consumed at home, which means any slowdown of U.S. demand could outweigh stronger exports, she added.

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U.S. Dairy Exports Still Strong, but for How Long?

Mon, 10 Mar 2025 19:37:07 GMT

The U.S. dairy industry relies heavily on exports to keep domestic markets balanced. Last year, U.S. dairy exports accounted for 16.4% of total U.S. milk production, and the dairy industry’s three largest export markets, Mexico, Canada, and China, accounted for more than half of all dairy exports by volume and value.

Mexican tariffs on U.S. dairy imports appear to be off the table for now, but the trade spat is far from over, said Sarina Sharp, analyst with the Daily Dairy Report. Mexico, the largest market for U.S. dairy overall, is also the leading buyer of U.S. nonfat dry milk (NDM) and cheese, accounting for 52.4% and 37.7% of their respective totals in 2024. The country is also the second largest market for butter and milkfat behind Canada. During the 2018-19 trade war that began under President Donald Trump’s first term, dairy product exports to Mexico fell 17.6% between 2018 and 2020, according to USDA export data.

“China has already imposed 10% tariffs on most U.S. dairy products. Tensions are running high between the U.S. and Canada, and conversations about Canada’s treatment of U.S. dairy imports are particularly heated,” Sharp said. “President Trump said he might place 250% tariffs on Canadian dairy products, mirroring above-quota tariffs for U.S. dairy exports to Canada. But members of the Trump administration recognize that administrative tricks to use up zero-tariff quota volumes are the real barrier to greater U.S. dairy exports across our northern border.”

If Canada reciprocates, it could be very painful for the U.S. dairy industry, she said. Last year, the United States exported nearly $1.4 billion worth of dairy products to Canada and purchased only $545,890 in return.

“The importance of exports to the U.S. dairy industry clearly can be seen in January’s export data,” Sharp said. “U.S. dairy exports topped year-ago volumes in January, thanks to a surge in butter and cheese shipments.”

The United States exported nearly 100 million pounds of cheese abroad in January, up 22% from January 2024 but just shy of last spring’s record-shattering volumes. Shipments to Mexico were 0.6% higher than January 2024’s very strong showing.

Share of U.S. Dairy Exports in 2024

(USDA’s Global Agricultural Trade Systems)

“The steep drop in U.S. butter prices in October and November attracted new buyers,” Sharp said. “U.S. butter and milkfat exports soared to a 26-month high of 15.74 million pounds, more than doubling January 2024 shipments. Canada bought the lion’s share. Canada and Mexico also imported significant volumes of U.S. cream. While U.S. butter imports retreated from the record-smashing volumes set in fourth-quarter 2024, they were still higher than any January on record.”

U.S. exports of less than 100 million pounds of nonfat dry milk (NDM) and skim milk powder (SMP) in January, were the lowest monthly total in more than five years and 20% less than in January 2024. And finally, U.S. whey powder exports rose 1% to 31.8 million pounds from January 2024.

“The steep drop in U.S. whey prices that occurred early this year could boost whey exports in months to come, but with the trade war at full boil, U.S. dairy exports could get burned,” Sharp noted. “That’s because China accounted for nearly half of U.S. whey exports in January, and the country has since levied a 10% border tax on U.S. dairy imports, effective March 10, making most whey products more expensive to Chinese importers.”

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Can Mexico Afford to Retaliate Against the U.S.?

Wed, 05 Mar 2025 19:46:39 GMT

President Donald Trump followed through on his threats of imposing a 25% tariff on most imports from Canada and Mexico, along with an additional 10% on goods from China. While China and Canada released their list of retaliatory tariffs the same day, Mexico’s president, Claudia Sheinbaum, says they won’t release their list until the weekend.

Sheinbaum said the country will also respond with a 25% tariff on U.S. goods but will announce the products it will target on Sunday.

But can Mexico afford to retaliate? That was one of the questions asked by USDA chief economist Seth Meyer during Commodity Classic this week. The reason is Mexico’s economy is struggling, due to a number of factors, which includes a large informal sector, high budget deficit and unstable infrastructure.

According to the Federal Reserve Bank of Dallas, Mexico’s GDP grew only 0.9% year over year in fourth quarter 2024, after expanding 2.% in 2023 and 4.6% in 2022. Economic growth slowed, mainly due to lower investment, slowing consumption and a contracting energy sector.

(Federal Reserve Bank of Dallas)

The Dallas Fed says lower investment and consumption was the main driver behind the slow growth.

“Investment contributed three percentage points less to GDP growth in 2024 compared with 2023,” the Federal Reserve Bank of Dallas said in a recent report. “The major drop was in nonresidential construction investment, while purchases of imported machinery and equipment also slowed noticeably as the Mexican peso continued to weaken against the dollar. In addition, consumption was impacted by sluggish growth in remittances, high interest rates and flat employment. However, net exports boosted growth in 2024 after dragging it down the previous two years.”

Extremely Reliant Upon Exports
The other issue? Mexico is extremely reliant upon demand from the U.S., exporting $41.9 billion worth of agricultural products to the U.S.

In 2023, Mexico accounted for 16.3% of U.S. agricultural exports and 23.3% of U.S. agricultural imports.

By the numbers:

Mexico is the largest source of horticultural imports to the U.S., supplying 63% of vegetables and 47% of fruit and nuts in 2023.
The top agricultural exports from Mexico to the U.S. in 2024 included beer, tomatoes, tequila, avocados, strawberries, raspberries and peppers.

Mexico is the Biggest Customer of U.S. Ag Exports

The other important piece is Mexico is now the U.S.'s top ag export destination.

According to Krista Swanson, chief economist for National Corn Growers Association (NCGA), Mexico is a huge destination for U.S. corn. More than 40% of U.S. corn exported last year went to Mexico. Not only does that mean the U.S. relies on Mexico, but Mexico is also reliant upon the U.S. do to the strong demand.

“That’s the other key piece here when we think about a Mexico situation, you know, will they retaliate on corn because it’s so important to the consumers in their country,” Swanson told Farm Journal during Commodity Classic this week. “And it’s such a big part of their diets and consumption. It’s a commodity that they consume way more of than what they produce. So they’re going to have to get it from somewhere.”

Bigger Picture
According to USDA’s Economic Research Service , between 1993 (the year before NAFTA’s implementation) and 2023, U.S. agricultural exports to Mexico expanded at a compound annual growth rate (CAGR) of 7%, while agricultural imports from Mexico grew at a rate of 9.7%.

“With the economic recovery in the United States and Mexico that followed the pandemic, U.S. agricultural exports to Mexico increased at a CAGR of 15.7% between 2020 and 2023, and U.S. agricultural imports from Mexico grew at a CAGR of 11.3%,” the USDA report said. “In 2023, however, U.S. agricultural exports to Mexico decreased by 0.3% compared with the previous year, as the prices of major agricultural exports (such as corn and soybeans) declined.”

Navigating Rough Waters: The U.S. Dairy Industry Amidst Global Trade Tensions

Wed, 05 Mar 2025 15:20:29 GMT

The U.S. dairy industry stands as a monumental economic pillar, supporting more than 3.2 million jobs and funneling approximately $800 billion into the U.S. economy. In recent years, the industry has made substantial investments to enhance its processing capacity, with over $8 billion allocated towards developments expected to come online in the near future.

Surprisingly, while the United States was a net importer of dairy products a decade ago, it has now emerged as a dairy export powerhouse, exporting $8 billion worth of products to 145 countries. As the industry rides this wave of success, it finds itself navigating turbulent trade waters that threaten these achievements.

Economic Impact of U.S. Dairy Exports
In 2024, U.S. dairy exports reached $8.2 billion, marking the industry’s second-highest level ever. Critical to this success are our closest partners, Mexico and Canada, which together account for more than 40% of U.S. dairy exports, importing record values at $2.47 billion and $1.14 billion, respectively. Significantly, China has also been importing between $500 million and $800 million worth of U.S. dairy in recent years. However, these relationships are now under strain due to ongoing tariff disputes.

Call for Resolution: Industry Leaders Weigh In
The International Dairy Foods Association (IDFA) has voiced its concerns regarding the current tariff situation, emphasizing the potential economic damage to American dairy farmers, processors, and rural communities. They urge the administration to promptly address and resolve trade disputes with Canada, Mexico, and China. The stakes are high, as prolonged tariffs could further limit market access and harm U.S. dairy’s competitive edge.

Part of the statement says, “We strongly urge the Administration to both resolve U.S. dairy’s trade barriers with these markets and the newly announced tariffs.”

Krysta Harden, President and CEO of the U.S. Dairy Export Council (USDEC), echoes these sentiments. Harden underscores that exports are vital to the U.S. dairy sector’s health, with one day’s worth of milk from every six destined for international markets. A quick resolution is imperative, she emphasizes, to preserve these vital export flows and to sustain opportunities for American farmers and workers.

“That’s a lot at stake,” Harden stated.
Adding to the dialogue, the National Milk Producers Federation (NMPF), led by President and CEO Gregg Doud, stresses the importance of trade relationships with Canada and Mexico. While acknowledging the administration’s view on tariffs as a tool to address larger issues such as the opioid crisis, Doud calls for swift resolution and aims to focus future efforts on the European Union, which has historically been resistant to U.S. concerns.

“Let’s focus on getting the concerns ironed out quickly so we can focus on bolstering these critical trade relationships,” he said.

As the U.S. dairy industry finds itself at the crossroads of prosperity and uncertainty, the resolution of ongoing trade disputes is crucial. The commitment of industry leaders to fostering and expanding global opportunities is evident, but without diplomatic progress, the gains made by American dairy producers could be at risk. It is time for strategic negotiation and renewed focus on international partnerships that will ensure the sustainability and growth of this vital industry.

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China Hits U.S. Agriculture, Says It Won’t Be Bullied by Fresh Trump Tariffs

China Hits U.S. Agriculture, Says It Won't Be Bullied by Fresh Trump Tariffs

Tue, 04 Mar 2025 16:28:54 GMT

China retaliated swiftly on Tuesday against fresh U.S. tariffs with hikes to import levies covering $21 billion worth of American agricultural and food products, moving the world’s top two economies a step closer towards an all-out trade war.

Beijing also slapped export and investment curbs on 25 U.S. firms, on grounds of national security, but, unlike when it retaliated against the Trump administration’s February 4 tariffs, this time avoided punishing any household names.

“Trying to exert extreme pressure on China is a miscalculation and a mistake,” a foreign ministry spokesperson told a press conference in Beijing, adding that China had never succumbed to bullying or coercion.

The latest retaliatory measures came as the extra duty of 10% U.S. President Donald Trump threatened for the world’s second-largest economy took effect at 0501 GMT on March 4.

That makes for a cumulative 20% tariff in response to what the White House considers Chinese inaction over drug flows.

China has accused the White House of “blackmail” over its tariff hike, saying it has some of the world’s toughest anti-drug policies.

Analysts say Beijing still hopes to negotiate a truce on tariffs, deliberately setting its hikes below 20% to leave its negotiators room to hash out a deal, but each escalation reduces the chance of a rapprochement.

“China’s government is signaling that they do not want to escalate,” said Even Pay, an agriculture analyst at Trivium China.

“It’s fair to say we’re in the early days of Trade War 2.0,” Pay said, adding there was still time to avoid a protracted trade war if Trump and Chinese President Xi Jinping were able to strike a deal.

Later on Tuesday, China said it would investigate U.S. producers of a type of optical fibre for circumventing anti-dumping measures, suspended the import licenses of three U.S. exporters, and halted China-bound shipments of U.S. lumber.

Additional Levies to Hit About 15% of U.S. Exports

The new U.S. tariffs represent an additional hike to pre-existing levies on thousands of Chinese goods.

Some of these products took the brunt of sharply higher U.S. tariffs last year under then President Joe Biden, including a doubling of duties on semiconductors to 50% and a quadrupling of tariffs on electric vehicles to more than 100%.

The 20% tariff will hit several major U.S. consumer electronics imports from China that had previously escaped untouched, from smartphones and laptops to video game consoles, smartwatches, speakers and Bluetooth devices.

China responded immediately after the deadline, with an additional tariff of 15% tariff on U.S. chicken, wheat, corn and cotton and an extra levy of 10% on U.S. soybeans, sorghum, pork, beef, aquatic products, fruits and vegetables and dairy imports from March 10.

The additional levies will hit about 15% of U.S. exports to China or $21 billion worth of trade, according to Reuters calculations based on U.S. census data for 2024.

Beijing also added 15 U.S. companies to its export control list that bars Chinese firms from supplying American companies with dual-use technologies.

It also put 10 U.S. companies on its Unreliable Entity List for selling arms to Taiwan, which China claims as its own territory, although the self-governing island rejects that.

“We’re still on track to 60% (tariffs),” said Cameron Johnson, a supply chain expert at Tidalwave Solutions, referring to Trump’s campaign trail threat.

“At the moment, with 20%, it just barely moves the needle for companies wanting to move potential supply chains out of the country,” he added.

“At 35%, we start to see that companies will start to move or consider other strategies.” China is the biggest market for U.S. agricultural products, and the sector has long been vulnerable to being used as a punching bag at times of trade tension.

Chinese imports of U.S agriculture goods fell for a second year to $29.25 billion in 2024, from $42.8 billion in 2022.

China’s futures markets were steady on the news.

The most actively traded soymeal and rapeseed meal futures in the world’s biggest agricultural importer rose 2.5% on Monday after the Global Times said Beijing planned to target U.S. agricultural exports.

Supply Chain Shifts

Trade tension risks exacerbating U.S. inflation and China’s efforts to ensure a durable post-COVID economic recovery, which has been heavily reliant on exports.

On Tuesday, the U.S.-China Business Council (USCBC) applauded Trump’s goal of tackling illegal trade in fentanyl, but said raising tariffs on Chinese products was not the way to achieve that goal.

“Across-the-board tariffs will hurt U.S. businesses, consumers, and farmers and undermine our global competitiveness,” its president, Sean Stein, said in a statement. All the same, the China-U.S. trade war could benefit third countries.

Since the United States and China imposed tit-for-tat tariffs during Trump’s first term, Beijing has moved to cut its reliance on American farm goods by spurring domestic production and buying more from countries such as Brazil.

U.S. agricultural exporters could also step up efforts to replace the China market by shipping more to Southeast Asia, Africa and India.

“Chinese tariffs on U.S. wheat and corn imports should be supportive for demand for Australian wheat and barely exports,” said Dennis Voznesenki, an analyst at Commonwealth Bank in Sydney.

“However, China’s recent slowdown in imports of feed grains from all origins should temper the excitement.”

(Reporting by Joe Cash, Mei Mei Chu and Nicoco Chan; Additional reporting by Ethan Wang, Qiaoyi Li, Ellen Zhang, Lewis Jackson and Ella Cao; Editing by Christian Schmollinger and Clarence Fernandez)

Even Just the Threat of Tariffs has Reduced Dairy Markets

Tue, 25 Feb 2025 14:00:00 GMT

The U.S. dairy industry is highly dependent on trade, with more than 20% of its total milk supply sold to other countries in the form of milk and dairy products, especially milk powders. Thus, even the threat of a trade war has had a chilling effect on nonfat dry milk (NDM) and skim milk powder (SMP) markets, according to Sarina Sharp, analyst with the Daily Dairy Report.

“While no new tariffs on U.S. dairy exports have been implemented, the risk of a trade war has already taken a toll on the U.S. dairy industry,” Sharp said.

Dairy Market News backed up that assessment when it reported that even the possibility of tariffs has caused domestic NDM buyers to take a step back “to avoid catching the proverbial falling knife.” CME spot NDM prices closed at $1.27/lb. last week, the lowest price in six months, and NDM futures were at their weakest levels since last summer.

“Throughout the final quarter of 2024, the bulls bellowed in the U.S. milk powder markets. Low U.S. output and tight global stocks buoyed U.S. powder values,” Sharp said. “A steep decline in milk and milk powder production in China in the second half of last year suggested the possibility of greater Chinese imports and higher prices.” CME spot NDM prices did indeed notch a two-year high in November.

While the supply outlook for NDM still remains bullish, the threat of tariffs has awakened U.S. bears. On the supply side, the same factors that choked off U.S. powder output last year—a heifer shortage, avian influenza, and competition for milk from other dairy processors—will continue to weigh on production this year, Sharp noted, adding that additional cheese processing capacity could drag U.S. powder output below its 11-year low.

On the demand side, the Trump administration’s announcement of 25% tariffs on Canada and Mexico, which were slated to begin on February 4, nearly set off a trade war after both Canada and Mexico responded by preparing to impose retaliatory tariffs. Since then, the United States, Mexico, and Canada have agreed to a 30-day reprieve from tariffs until March 4.

Interestingly, while Mexico did not include NDM in its list of potential targets for retaliatory tariffs, trade tensions have nonetheless chilled cross-border dairy commerce, Sharp said. Dairy Market News recently described Mexican demand for U.S. milk powder as “subdued,” and buyers have expressed concerns about committing to buy milk powder today that could face tariffs in the near future.

At the same time, the bulls remain mostly in charge in Oceania. Skim milk powder values at the Global Dairy Trade auction are close to November’s highs, and New Zealand dairy co-ops have been raising forecasts for pay prices to producers. Despite the recent recovery in prices, Dairy Market News reported an uptick in international queries for SMP from New Zealand as traders worldwide wait to see what happens with U.S. tariffs.

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Trump Imposes Sweeping Steel and Aluminum Tariffs, Sparking Trade War Risks

Tue, 11 Feb 2025 15:57:02 GMT

President Donald Trump as expected raised tariffs on steel and aluminum imports to a flat 25% without exceptions , aiming to support struggling domestic industries but escalating trade tensions worldwide. The measures, effective March 12, eliminate country-specific exemptions and extend to downstream steel and aluminum products, affecting key suppliers such as Canada, Mexico, Brazil, and South Korea.

The move expands Trump’s 2018 Section 232 tariffs, justifying the action on national security grounds.

“It’s 25% without exceptions,” Trump emphasized, adding that reciprocal tariffs on countries taxing U.S. goods will be announced soon.

According to the White House fact sheet , the move is to restore fairness into the steel and aluminum markets, while also strengthening the manufacturing industry in the U.S. The White House fact sheet states:

Foreign nations have been flooding the United States market with cheap steel and aluminum, often subsidized by their governments.
A report from the first Trump Administration found that steel import levels and global excess were weakening our domestic economy and threatening to impair national security.
While the domestic steel industry briefly achieved 80% utilization in 2021, subsequent trade pressure following the COVID-19 pandemic has depressed domestic production. In 2022 and 2023, capacity utilization fell to 77.3% and 75.3%, respectively. High import volumes from sources exempt from Section 232 tariffs are a major factor in depressing domestic production volumes.
For aluminum, there was an increase in the capacity utilization rate between 2017 and 2019, from 40% to 61% during that period. But since 2019, the aluminum capacity utilization has once again seen a steady decline, falling from 61% to 55% between 2019 and 2023.
The United States does not want to be in a position where it would be unable to meet demand for national defense and critical infrastructure in a national emergency.

Criticism from Canada

Canada criticized the action as unjustified, citing its critical role in U.S. supply chains. The European Commission, South Korea, and other affected nations expressed concern, with retaliatory measures and negotiations expected in the coming days.

U.S. steel and aluminum producers saw stock gains, while foreign steelmaker shares fell.

Trump Considers Exemption for Australia on Steel, Aluminum Tariffs

President Trump agreed to consider exempting Australia from newly reinstated steel and aluminum tariffs, following a call with Australian Prime Minister Anthony Albanese. Trump reintroduced a 25% tariff on imports after previously allowing duty-free quotas. The decision could escalate trade tensions globally.

Citing Australia’s trade surplus with the U.S. and the strategic Indo-Pacific partnership, Trump acknowledged the exemption request, saying he would “give great consideration” due to the strong bilateral ties and Australia’s minimal share of U.S. steel (1%) and aluminum (2%) imports. Albanese described the call as constructive, expressing confidence in a favorable outcome. Australian officials highlight the importance of steel exports for U.S. defense supply chains, especially under the AUKUS pact.

South Korea Seeks Talks with President Trump

South Korea’s acting President Choi Sang-mok said the government would seek talks with the Trump administration on the tariffs Washington is imposing to reflect the interests of domestic companies. The CEOs of 20 major South Korean conglomerates plan to visit the U.S. in the near future, while the government intends to discuss response measures with Japan and the European Union, Choi said.

EU Expected to Respond Strongly

The European Union pledged a robust response to the U.S.’ recent imposition of 25% tariffs on steel and aluminum imports, a move that has reignited transatlantic trade tensions. European Commission President Ursula von der Leyen warned that “unjustified tariffs” will trigger “firm and proportionate countermeasures.”

The EU is exploring several options, including:

Targeted tariffs: Imposing reciprocal tariffs on U.S. goods, focusing on politically sensitive sectors.
WTO challenge: Filing a complaint with the World Trade Organization.
Safeguard measures: Protecting European industries from potential surges in imports redirected from the U.S. market.

German Chancellor Olaf Scholz and French Industry Minister Marc Ferracci have both emphasized the need for a unified EU response. The European Commission has convened an emergency meeting of trade ministers to discuss next steps, signaling the potential for a broader trade conflict if the U.S. does not reconsider its tariff policy.

Trudeau Slams U.S. Tariffs on Canadian Steel and Aluminum as “Unjustified”

Canadian Prime Minister Justin Trudeau criticized U.S. tariffs on steel and aluminum as “entirely unjustified,” according to a CBC video posted on X. Trudeau emphasized that Canada’s response “will be firm and clear” while the government engages with Donald Trump’s administration to underline the tariffs’ negative impact on both nations. When asked about the possibility of retaliatory tariffs, Trudeau expressed hope that escalation could be avoided.

Trump Confirms Speaking with China’s Xi Since Taking Office

President Donald Trump revealed in a Fox News interview that he had spoken with Chinese President Xi Jinping since his inauguration on Jan. 20 but did not disclose details of the conversation.

“We have a very good personal relationship,” Trump said, though he did not specify when the call took place or what was discussed.

Despite rising tensions between the U.S. and China over trade, cybersecurity, Taiwan, and other issues, Trump previously stated he was in no rush to contact Xi regarding the ongoing trade conflict. The Chinese Foreign Ministry did not confirm the latest conversation, instead referring to a scheduled call on Jan. 17 before Trump officially took office.

Meanwhile, China recently responded to U.S. trade tariffs with targeted duties on American imports and potential sanctions on several U.S. companies, including Google.

Trump’s plan to call Xi following his latest round of tariffs on China has been delayed, with no contact yet made.

Trump says he’s “in no hurry,” but the Wall Street Journal says insiders suggest that Beijing hasn’t proposed a concrete plan to curb China’s role in the U.S. fentanyl crisis — a key demand behind Trump’s decision to impose an additional 10% tariff on Chinese goods.

A U.S. administration official noted that the tariffs could be paused if “serious headway” is made on fentanyl during the next Trump-Xi conversation. Unlike the quick deals reached with Mexico and Canada that resulted in suspended tariffs, China has yet to offer a concession.

“The Chinese should just offer to crack down on fentanyl once and for all,” an American executive told the WSJ, highlighting Beijing’s proven efficiency in suppressing dissent and private enterprise. But President Xi appears in no rush. Instead, he’s pursuing a broader agreement that could shape long-term U.S./China relations.

Beijing’s initial proposal, according to the Wall Street Journal, involves reinstating elements of the 2020 trade deal, a renewed pledge not to devalue the yuan, and commitments for increased U.S. investments. For now, however, Xi seems willing to absorb the additional tariffs, relying on Chinese companies’ ability to reroute exports through third countries.

In response to the U.S. tariffs, China has imposed modest retaliatory measures, avoiding full escalation while keeping leverage on the table. Actions include new tariffs on U.S. energy imports and an investigation into Google for potential antitrust violations.

Of note:
1.36 billion shipments entered the U.S. in fiscal year 2024 using the de minimisprovision. The provision allowed bargain platforms Shein and Temu to skirt import duties on low-value packages from China.

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Navigating Uncertain Waters: The Impact of New Tariffs on U.S. Dairy Farmers

Tue, 04 Feb 2025 14:13:10 GMT

Amidst a backdrop of economic uncertainty, the dairy industry in the U.S. is about to embark on a challenging journey in 2025. The recent executive orders signed by President Trump have introduced significant tariffs on goods imported from key trading partners. With 25% tariffs on most goods from Mexico and Canada, and 10% on goods from China, the ramifications for U.S. dairy farmers could be profound.

Understanding the Impact of Tariffs
Charles Nicholson, an adjunct associate professor in the School of Integrative Plant Science at Cornell University, suggests that the combination of these new tariffs, alongside deportations and potential cuts in food and nutrition spending, could culminate in a staggering $6 billion loss in profits for U.S. dairy farmers over the next four years. Speaking at the 2025 Dyson Agricultural and Food Business Outlook conference, held January 17, Nicholson noted, “If you pick a trade fight with our major export destinations – Mexico, Canada and China – and they decide to retaliate, that has some substantive negative implications for dairy farms and processors.”

Importance of Key Export Markets
Mexico, Canada, and China are pivotal to the U.S. dairy export landscape, accounting collectively for over half of the nation’s dairy exports by value annually. History has shown us the risks associated with trade instability. For instance, retaliatory tariffs from China alone resulted in an approximate $2.6 billion in lost revenues for U.S. dairy farms from 2019 to 2021. This underscores the potential financial hazards that could lie ahead.

Market Reaction
The initial announcement sent ripples through the markets, with stakeholders bracing for retaliatory actions from Mexico, Canada, and China. However, a temporary delay in Mexico’s tariffs provided a brief reprieve. Canada, meanwhile, has already released a list of products subject to their own set of 25% tariffs, which include key dairy products like milk, cream, and butter. Mike North, president of Ever.Ag, shared that Monday’s trade was a little calmer as news broke of a delay to Mexico’s tariff following discussions between the countries’ leaders that saw a movement of Mexican troops to the border. Although he notes that these tariffs, especially on cream and butter, could greatly affect U.S. dairy prices, as Canada is a major export destination.

North says perhaps the bigger question that lingers is how long these measures remain in place.

“Predictably, this will add volatility to demand that may overshadow the ongoing focus around supply,” he says. “Only small changes can have large impacts on price. Producers are well advised to brace for the disruption that these tariffs will likely create.”

A Call for Diplomacy and Resolution
In light of these developments, Krysta Harden, the President and CEO of the U.S. Dairy Export Council, has issued a statement advocating for resolution through dialogue. Highlighting the announcement, she stated, “Yesterday President Trump signed three Executive Orders imposing 25% tariffs on most goods from Mexico and Canada and 10% tariffs on goods from China, all of which are set to go into effect on Tuesday, Feb. 4. The White House cited the ongoing flow of illicit drugs into the United States as the primary reason behind the imposition of tariffs. While this legitimate concern needs to be swiftly addressed, we urge discussions between all countries involved to resolve the issues in a manner that preserves the livelihoods of dairy farmers and manufacturers in rural America.”

The International Dairy Foods Association (IDFA) released the following statement in response to the tariffs:

“The U.S. dairy industry is watching closely as the President and his Administration leverage U.S. law and tariffs as a negotiating tool to strengthen America’s national security. We know the Administration understands that robust market access to Canada, Mexico, and China—our three largest trading partners—is critical to the future of U.S. dairy, and we remain hopeful that the President and his Administration do everything in their power to ensure the tariffs avoid unintended impacts on our dairy farmers and processors, including the potential for retaliatory tariffs on U.S. dairy exports. IDFA remains committed to working with the Trump Administration to expand trade opportunities for our industry, and we urge the Administration to continue proactive negotiations with our top trading partners to ensure dairy trade continues to grow.”

As the industry braces itself for a tumultuous road ahead, it is crucial for stakeholders across the board to engage in constructive dialogue and seek resolutions that protect the backbone of rural America – our dairy farmers. The repercussions of these international trade policies are significant, and the actions taken now will shape the landscape of the dairy industry for years to come.

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Trump Agrees to Delay Tariffs on Goods From Mexico and Canada for 30 Days

Mon, 03 Feb 2025 16:14:46 GMT

The U.S. has agreed to delay tariffs on goods from Mexico and Canada for one month to allow for more time for negotiations. The agreement from both sides happened on Monday, just hours before the tariffs were set to take effect.

Sostuvimos una buena conversación con el presidente Trump con mucho respeto a nuestra relación y la soberanía; llegamos a una serie de acuerdos:

1.México reforzará la frontera norte con 10 mil elementos de la Guardia Nacional de forma inmediata, para evitar el tráfico de drogas…
— Claudia Sheinbaum Pardo (@Claudiashein) February 3, 2025

President Claudia Sheinbaum said U.S. tariffs against Mexico will be delayed for one month after a conversation with President Donald Trump on Monday. Trump then confirmed the news on Truth social.

Mexico’s president said she had reached several agreements with Trump during the phone call and that both countries will start working on trade and security.

Sheinbaum also said her government agreed to reinforce the border with the U.S. with 10,000 National Guard officers to prevent the trafficking of drugs, particularly fentanyl, from Mexico to the U.S.

Trump had announced plans to hold discussions with the leaders of Canada and Mexico on Monday following his recent declaration of imposing significant tariffs on imports from these countries and China.

“I don’t expect anything very dramatic,” Trump said before he held any of the calls. “We put tariffs on. They owe us a lot of money, and I’m sure they’re going to pay.”

Tariffs Also Delayed At Least One Month on Goods from Canada

Just hours after Mexico’s president said Trump agreed to pause tariffs for at least 30 days, Canadian Prime Minister Justin Trudeau made a similar announcement on X.

I just had a good call with President Trump. Canada is implementing our $1.3 billion border plan — reinforcing the border with new choppers, technology and personnel, enhanced coordination with our American partners, and increased resources to stop the flow of fentanyl. Nearly…
— Justin Trudeau (@JustinTrudeau) February 3, 2025

In his tweet, Trudeau wrote, “I just had a good call with President Trump.”

Trudeau also committed to appointing a “Fentanyl Czar” and better patrol the border.

Executive Order Over the Weekend Hit Mexico and Canada With Tariffs

Before and after Trump singed the executive order over the weekend, Mexican President Claudia Sheinbaum vowed to counter with retaliatory measures. On Saturday, Sheinbaum announced Mexico would issue its own retaliatory measures to Trump’s 25% tariffs, but no specifics were unveiled.

Sheinbaum said last week she had told her economy minister “to implement Plan B” which she said “includes tariff and non-tariff measures” though it was not clear what those measures were exactly.Sheinbaum said: “We have Plan A, Plan B, Plan C, depending on what the government of the United States decides. It’s very important that Mexicans know that we will always defend the dignity of our people, respect for our sovereignty and a dialogue among equals [with the U.S.], not with subordinates.”

Sheinbaum noted that Mexico has been open to receiving its citizens sent back under Trump’s plan for mass deportation of unauthorized migrants and that it was prepared to take some from other countries, which represented a concession. Deputy Economy Minister for Trade Luis Rosendo Gutierrez is expected to travel to Washington on Monday, according to reports. But he can’t meet with U.S. trade or Commerce Department officials until they’re formally ratified, they said. Instead, he’ll talk to business leaders and associations. Sheinbaum has also pointed to Foreign Minister Juan Ramon de la Fuente as a key interlocutor to US Secretary of State Marco Rubio.

High-level teams from Mexico’s foreign ministry and the State Department are in frequent communication working on security and migration, Mexico is the No. 1 trade partner of the United States, and sends 80% of its exports north. Mexico supplies around half of America’s imported fruit and two-thirds of imported vegetables, in dollar terms — tomatoes, berries, bell peppers, cucumbers. And it’s the largest source of imported beer. Mexico also is the No. 1 provider of medical devices to American hospitals and doctor’s offices, from surgical gloves to scalpels. Mexico emerged last year as the top market for American agricultural exports, totaling $30 billion.

Trump announced general tariffs at his Mar-a-Lago, Florida estate. White House spokesperson Karoline Leavitt said the tariffs would be implemented immediately, but as noted, Canada said tariffs would be implemented on their goods on Tuesday. It typically takes weeks for tariffs to take practical effect.

Key points:

Sector-specific tariffs: New duties will target high-tech and industrial sectors, potentially covering more imports by dollar value than previous tariffs on China. Trump also suggested Friday he’d consider new tariffs on oil and gas, potentially by Feb. 18, though it wasn’t clear what he was referring to.
The duties come on top of existing tariffs on those products. The first Trump administration imposed tariffs on more than $300 billion worth of Chinese goods to respond to an array of unfair trade practices, including intellectual property theft. The Biden administration kept all of them in place and increased rates on $18 billion in goods, including electric vehicles, solar panels, medical equipment, lithium-ion batteries, steel, and aluminum.
A second wave of tariffs could follow a comprehensive review of the trade relationship among the three countries (Canada, Mexico and China) that Trump has ordered completed by April 1.
Exemptions and negotiations: There are ongoing discussions about potential carve-outs for critical industries (like oil and automobiles) amid intense lobbying by U.S. business and labor groups. Some hope for exemptions to mitigate domestic economic risks. Trump told reporters in the Oval Office on Friday that there was nothing Canada, Mexico and China could do to avoid the tariffs before Saturday. “Not right now,” he said, telling reporters that his tariff threat wasn’t a negotiating tool. “It’s a pure economic [decision],” he said. But he did say he was considering a lower tariff on Canadian crude oil — 10% instead of 25% (and that it was he announced on Saturday). At nearly $100 billion in 2023, imports of crude oil accounted for roughly a quarter of all U.S. imports from Canada, according to U.S. Census Bureau data. The tariff on China would be for what Trump said was failing to stop the manufacturing of fentanyl precursor chemicals.

Reasons for the tariffs”

Trump on Friday said, “We’ll be announcing the tariffs on Canada and Mexico for a number of reasons. Number one is the people that have poured into our country so horribly and so much,” he said about migrants that have entered the United States via its southern and northern borders. “Number two are the drugs, fentanyl and everything else, that have come into the country and number three are the massive subsidies that we’re giving to Canada and to Mexico in the form of [trade] deficits,” Trump said. “I’ll be putting the tariff of 25% on Canada and separately 25% on Mexico and we will really have to do that because we have very big deficits with those countries. Those tariffs may or may not rise with time,” he said.

During a Friday press conference in the Oval Office, Trump criticized the previous administration’s handling of trade agreements. During his previous term, Trump initiated trade disputes, particularly with China, which significantly impacted U.S. agricultural exports. He stated that China had committed to buying $50 billion a year in farm products, but claimed that former President Joe Biden didn’t enforce this commitment. Trump said, “We’re going to enforce it,” referring to this $50 billion annual purchase agreement with China. His recent statements suggest a continuation of this aggressive stance on trade, framing it as necessary to protect American farmers and correct perceived imbalances left unaddressed by the Biden administration.

Trump’s team was initially considering a grace period between the announcement of the tariffs on Saturday and when they would be imposed, but White House press secretary Karoline Leavitt played down that possibility on Friday. Leavitt said that a Reuters report stating that the tariffs wouldn’t be implemented until March 1 was “false.”

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China’s Demand for Milk Powders Picks Up

Mon, 27 Jan 2025 14:52:26 GMT

China continues to cut back on its purchases of milk powders in the global market, a worrying sign for dairy-exporting countries, especially Oceania. However, a shift in the type of dairy products that China continues to purchase could be good news for U.S. dairy exporters if trade wars don’t erupt under the new Trump administration.

According to China’s National Bureau of Statistics (NBS), the country’s economy grew an estimated 5% in 2024, driven by exports and investment. Betty Berning, analyst with the Daily Dairy Report, noted that while growth was better than analysts expected, “weak consumer spending coupled with the fallout from the real estate crisis remain ongoing concerns.”

China’s population also declined for the third year in a row in 2024, according to NBS. As the country’s population shrinks and ages, a declining workforce will create ongoing challenges for China’s economy, said Berning.

“China’s dairy business, which is essential for dairy-exporting nations, is a sizable piece of the global import pie. However, it seems likely that China’s piece of the pie could shrink, or the product mix could shift, as the country adjusts to an older population and economic issues,” Berning said.

China’s imports of ultra-high temperature (UHT) milk have been particularly weak. The country purchased 27% less UHT milk in December than it did in 2023. For all of 2024, China’s year-over-year purchases of UHT milk plummeted 24%—the lowest annual value since 2015, Berning noted.

In December, China imported more than 95 million pounds of whole milk powder (WMP), more than double December 2023 volumes. Yet despite December’s large purchases, China’s year-to-date imports of 899 million pounds of WMP were 5% smaller than in 2023 and less than half the record-high set in 2021. The country’s year-over-year skim milk powder imports in December also rose but were down a steep 34% for the year vs. 2023.

While China’s full-year imports of milk powders and UHT milk declined, the country’s interest in other products has been picking up. For example, China imported a record 28.4 million pounds of butter in 2024, and 2024 cheese shipments, although down 3% from 2023, were formidable nonetheless, Berning said. Cheese imports in 2024 were the third largest on record. Whey imports, which were down 1.3% for the year, also ranked as the third largest.

At the same time total dairy product purchase volumes have declined, domestic milk production in China has also slowed after increasing for several years. That has left Chinese processing companies with less milk to produce into WMP and other dairy products.

“Demand for WMP in China was not great in 2024, and that offset lost milk production,” Berning said. “But given December’s strong import volumes and recent price strength at the Global Dairy Trade auctions, WMP demand could be returning and will remain a wildcard worth watching in 2025.”