Dairy Trade

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.

Canada’s Dairy Industry Thrives

Thu, 20 Nov 2025 14:00:00 GMT

Canada’s population growth climbed 3% in 2024, primarily through immigration, which has been good for the Canadian dairy industry and has helped the country maintain its highly protected and subsidized dairy industry, according to Sarina Sharp, analyst with the Daily Dairy Report. After years of exceptional gains, the rate of growth has slowed to a year-over-year increase of 0.9% for the first six months of the year to just shy of 41.6 million people. By comparison, the U.S. population grew by 0.98% in 2024 compared to 2023.

“Due primarily to an increasing population, Canadian dairy demand appears to be sufficient to absorb domestic milk production growth and accommodate more imports, and that’s good news for the U.S. and European dairy exporters,” Sharp said.

Canadian milk production reached an all-time high in the first half of the year, with output up 1.4% from 2024 volumes after adjusting for leap day, which means dairy producers are sending increasing volumes of milk to dairy processors. According to Statistics Canada, first-half deliveries were up 1% increase compared to the first six months of 2024. For the year, Canadian dairy processors expect to take in more than 7 million metric tons of milk this year, a record high.

“A growing population and greater demand for dairy have allowed Canada’s dairy sector to grow even as the historically insulated industry has been forced to open the door to more imports,” said Sharp. “While Canada has tried creative ways to import less dairy than agreed to in recent trade negotiations and dispute resolutions, Canada’s January through August imports of cheese and butter hit all-time highs.”

In the first nine months of 2025, butter imports outpaced 2024 volumes by an impressive 33%. The United States accounted for two-thirds of that total. For cheese, the United States supplied 36% of Canada’s imports, second only to the EU-27’s 50% share, according to data from Trade Data Monitor.

“While Canada remains a net exporter of skim milk powder, the positive trade balance has been shrinking,” Sharp noted. In August, Canada sent just 410,000 metric tons more skim milk powder abroad than it took in, the smallest monthly net exports since early 2016.

Despite Economic Uncertainty, China Continues to Buy Dairy

Thu, 30 Oct 2025 12:59:28 GMT

China continues to import significant volumes of butter and cheese despite ongoing economic concerns and growing domestic milk production, but imports are still not as strong as they were years ago, according to Betty Berning, analyst with the Daily Dairy Report.

“China has been working toward dairy self-sufficiency by investing in dairy farms, which has been bringing import values down. In addition, Chinese consumers could also be shifting their preferences to other products, which also could be cutting into imports of some dairy products,” Berning says.

Offering evidence for the changing consumer preference theory, Berning notes 2025 butter and cheese imports to China through September were on pace to set record highs for the year. According to data from Trade Data Monitor, China’s cheese imports climbed 13.5%, relative to September 2024, to 31.5 million pounds, and for the first nine months of the year, they were 8.7% ahead of the same period in 2024. Butter imports also topped 23.7 million pounds for the year, 8.8% larger compared to the first nine months of 2024.

Whole milk powder (WMP) imports to China, which are sourced mostly from New Zealand, grew 41% in September to 32.3 million pounds, against a weak comparison in the same month in 2024. Year to date through September, China imported 724.2 million pounds of WMP, the ninth largest volume since 2016, with only 2024 lagging in the data set. Skim milk powder imports of 18.6 million pounds sank 3% from September 2024 and were the lowest September figure since 2011. Meanwhile, whey imports fell slightly, down 3.1% compared to September 2024, to 117.4 million pounds.

“Surprisingly, China’s imports of U.S. whey products only dropped 0.5%, despite ongoing trade tensions between the two nations,” Berning says. “Earlier this year, China announced plans to reduce its hog population by 1 million breeding sows. As a result, whey imports, including those from the United States, with or without tariffs, could continue to dwindle in coming months.”

The uncertainty surrounding the Chinese economy also continues to cloud the dairy import forecast.

“Even though growth in China’s third-quarter GDP of 4.8% met analysts’ expectations, it was the smallest increase in a year,” Berning says. “Of concern was a year-to-date decrease of 0.5% in fixed-asset investment, which includes real estate. Economists had expected this area to grow modestly, and the decline underscores ongoing issues in the Chinese real estate market.”

This ongoing economic uncertainty has spurred cautiousness in Chinese consumers. While year-over-year retail sales rose 3% in September, they were down compared to August.

Berning says: “Given the uncertain economy and the ongoing trade dispute, huge sales of U.S. dairy products to China seem unlikely until the Chinese economy shows lasting signs of strength.”

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Dairy Trade: The Good and The Ugly

Wed, 29 Oct 2025 12:35:18 GMT

Historically, China has been a vital part of the U.S. export demand for dairy products. They are ranked third among U.S. agricultural export markets according to USDA, and have been third in dairy — behind Mexico and Canada — in purchases from the U.S.

In 2024, China purchased $583.6 million in U.S. dairy products, over $30 million more than their 10-year average, with a total volume of 385,609 metric tons. They have grown their demand of U.S. dairy products 29% in the last 10 years.

When comparing 2024 to 2025, January to July purchases have been slightly higher in 2025 than 2024, solely on the back of whey, casein, and “other dairy products”, while cheese, non-fat dry milk and ice cream are all significantly behind last year.

While in line with the 10-year average, China has drastically reduced U.S. dairy product demand since the highs they imported in 2021 and 2022 — nearly $220 million less in 2024 than the high of $802.8 million reached in 2022. The growth from the Phase I Trade Deal can be tracked from 2020 through 2023, with many dry products, such as milk powder, peaking in 2021 then sharply falling off in 2024 due to an oversupply of product in China as well as tensions flaring between the two countries, eventually leading to tariffs and retaliatory tariffs announced in early 2025.

To put this in perspective, we exported $8.25 billion worth of dairy products in 2024 with a total volume of 2.66 million metric tons. To Mexico, $2.47 billion worth of dairy products was exported and Canada purchased $1.18 billion. So while China is ranked third, the demand there is overshadowed by our neighbors.

Still, with the bleak outlook dairy markets have been stuck in for the last several months, should China return to volumes seen just three or four years ago, it would certainly help support dairy prices. Especially with the increase in demand from the EU as seen more recently.

Unfortunately, the possibility of a trade deal with China isn’t the only foreign affairs to keep an eye on, as we took a major step back last week in discussions with Canada, our No. 2 importer of dairy products. For dairy specifically, the formal review of the United States-Mexico-Canada Agreement is expected to happen in 2026. One of the concerns President Trump has called out in the past is the quota system, which has been deemed as unfair to the American dairy producer. The tensions are high as Trump called off trade talks last week over an anti-tariff advertisement featuring a Reagan-era clip opposing tariffs. The Ronald Reagan Presidential Foundation and Institute had an official statement, claiming the ad misrepresents the presidential radio address used from 1987 and the Government of Ontario did not have permission to use or edit the remarks. For now, it’s one step forward and one step back as negotiation results are still to be determined.

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Dairy’s Balancing Act: Exports Boom, Beef-on-Dairy Surges, Milk Prices Drag

Fri, 03 Oct 2025 18:29:37 GMT

At World Dairy Expo in Madison, Wisconsin, the conversation among industry leaders highlighted the complex dynamics shaping today’s dairy and broader agricultural markets. From volatile milk prices to the rise of beef-on-dairy, and from export dependence to uncertainty with China, producers and analysts agree: resilience and adaptation are more critical than ever.

Milk Prices Under Pressure Despite Protein Craze

Milk prices are a few dollars lower than they were at this time last year. The slump is happening even as global demand for protein continues to climb.

“We have more cows, productivity per cow is rising, and butter fat prices have dropped,” said Dan Basse, founder and president of AgResource Company. “When dairy farmers see a profit, they expand their herds—it’s a cycle we’ve seen many times.”

While producers are benefiting from selling bull calves at higher prices, Basse noted that milk margins remain tough unless farms are operating at scale.

Domestic Demand Stalls, Exports Carry the Load

Mike North, principal at Ever.Ag, pointed to soft consumer demand as another factor holding milk prices back.

“We’re basically flat,” North said of domestic dairy demand. “Consumers aren’t going to restaurants like they have, and restaurant chains have had to push new value propositions to bring people in. Without that, demand is sour.”Exports, however, have hit record highs. North emphasized that without international sales, the U.S. dairy industry would be facing far worse price pressures.

Beef-on-Dairy Provides Major Boost to Farm Revenue

For producers like Ken McCarty of McCarty Dairy, one bright spot has been the rapid rise of beef-on-dairy, which has transformed once low-value Holstein bull calves into a significant revenue stream.

“We remember the days when we were trying to sell Holstein bull calves, two for five dollars, and you couldn’t get rid of them,” McCarty recalled. “Today, those sales can account for around 50% of our overall revenue.”

Basse predicted that strong beef-on-dairy calf prices will likely persist for at least the next two to three years, given the shortage of beef cow numbers in the U.S.

The Road Back to Higher Milk Prices

While beef-on-dairy is helping offset losses, producers remain eager for milk checks to rise. North stressed that recovery depends on stronger domestic demand and improvement across product categories.

“Butter is back to $1.60—we haven’t seen that since COVID—and cheese is about the same,” said North. “Until we get lift across all categories, we’re not going back to those $20-plus milk prices.”

He added that beef-on-dairy is effectively providing $3 to $4.50 per hundredweight in revenue to help fill the gap.

On-the-Ground Challenges: Labor and Rural Stability

Beyond markets, McCarty pointed to labor shortages and rural economic health as ongoing concerns.

“We don’t have the luxury of taking Christmas Day off,” McCarty said. “Accessing quality labor is a huge issue. But equally concerning is market volatility and what that means for our neighbors. When downturns hit, we worry about the long-term vibrancy of our rural communities.”

Trade, China, and Grain Markets Add More Uncertainty

The discussion also touched on broader ag markets. Basse expressed skepticism about any major new trade deal with China, noting that the country views the U.S. as an unreliable supplier.

“I’m doubtful of a deal with China,” Basse said. “It does tell us that we’ve had short coverings with China, I think we don’t need to think of China as the phase one agreement that was done before. That will not happen. This may be somewhat off some some modest deals, if you will. But I think when you think of China, it sees the United States as an unreliable supplier. “We came to them, beat them up at 18 and 19. They began paying back, you know, with a phase one deal. And then the Biden administration said. Nothing. And here we are negotiating again. So when I think about China, I am not optimistic they’re going to come back in a big way for U.S. corn, soybeans or other products.”

North added that without Chinese demand, soybean markets remain capped, especially as Argentina re-emerges as a competitive supplier with the elimination of its export tax. Meanwhile, bearish grain stocks reports continue to pressure corn markets.

A Balancing Act for the Future

Taken together, the dairy industry sits at a crossroads: global exports are providing a lifeline, beef-on-dairy is reshaping farm economics, but stagnant domestic demand, volatile grain markets, and persistent labor issues are limiting growth.

For dairy farmers like McCarty, survival means not just managing milk margins, but also navigating the ripple effects on their communities.

“We depend on our neighbors for feed, and they depend on us,” he said. “If rural America can’t stay strong, neither can the dairy industry.”

Dairy’s Moment, Policy Hurdles, and Global Trade: A Case for Dairy's Undeniable Momentum

Thu, 02 Oct 2025 11:41:07 GMT

Gregg Doud, president and CEO of the National Milk Producers Federation , sat down with us during World Dairy Expo to talk about what’s driving momentum in dairy, the challenges ahead, and why he believes U.S. producers are well-positioned globally.

Q: When you look at the dairy sector today, what are the biggest opportunities and challenges?

A: I see three big things. First is investment. We’re looking at nearly $10 billion in new U.S. dairy processing capacity from 2023 through 2026. There’s nothing like it in the history of U.S. agriculture—of any commodity. That reflects the reality that the U.S. is where dairy has room to grow.

Second, it’s all about protein demand. Globally, the appetite for protein—beef, pork, poultry, and dairy—is remarkable. Just look at the resurgence of cottage cheese. It’s everywhere right now. Domestically and internationally, demand is rolling. This year, U.S. dairy exports are up 2% in volume and 16% in value.

Third, we’re seeing strong efficiencies on the farm—better genetics, better feed, longer-living cows. U.S. milk production is up around 3%. The limiting factor, though, is the rise of beef-on-dairy, which is both a revenue stream for producers and a governor on overproduction.

Q: With tariffs still in place in some markets, is export demand holding?

A: The only country retaliating against us right now is China. Everywhere else is normal. And even with China, that’s more about geopolitics than dairy. The weaker dollar this year has also been a big help to U.S. ag exports overall.

Q: Where are you seeing the most expansion in production?

A: Texas, South Dakota, Kansas—the middle of the country is leading the way. But New York is also interesting. They’re building processing capacity that outpaces their current cow numbers, which means longer-term we’ll see expansion there, too.

Q: Let’s turn to policy. We hear the term “dairy cliff” every time the farm bill deadline looms. Is that a real concern?

A: Honestly, no. The so-called dairy cliff—milk at $70 per hundredweight—isn’t realistic. Congress has always extended farm bill authority when needed, and I expect they will again. The bigger challenge is the broader dysfunction in Washington—we can’t seem to get 60 votes in the Senate. That stalls everything.

Q: How would a government shutdown affect dairy?

A: My biggest concern was USDA’s role in price discovery. Fortunately, USDA confirmed they’ll continue collecting the data needed to set milk prices, even in a shutdown. So that’s a relief.

Q: Labor remains a major challenge. Any progress on a fix?

A: Yes, conversations are happening. Short-term, the administration is looking at adjustments to the H-2A program. But dairy needs year-round labor, so that doesn’t really help us. Long-term, Congress must act. Chairman G.T. Thompson is working on it, but immigration reform always runs into the 60-vote problem in the Senate. Still, I’m hopeful. Former Ag Secretary Mike Johanns recently told me the political stars are aligning like they did in the late ’80s when big reforms last happened. That gives me optimism.

Q: You’ve been at the table in trade negotiations. Can the U.S. still strike a new deal with China?

A: I think every effort will be made. But let’s be clear: a deal isn’t real until U.S. Trade Representative says it’s real. They’re working hard right now—not just with China but also Vietnam, Indonesia, and others. The challenge is that China today isn’t the China of 2019. Brazil has surged in soy and corn production, becoming a formidable competitor. Meanwhile, China’s own economy has slowed, which is softening demand, including for dairy.

Q: Longer term, what are NMPF’s policy priorities?

A: At the top of the list is “Whole Milk for Healthy Kids.” We’re down to one senator away from making it a reality in schools. That’s huge. We’re also watching the new dietary guidelines, which I think will be favorable to dairy. Combine that with the processing investments underway, and I believe the future looks very bright.

Q: Final thoughts?

A: We’re hitting on all cylinders—processing investment, protein demand, exports, beef-on-dairy. Yes, we’ve got challenges with labor and policy gridlock, but the momentum for U.S. dairy is undeniable.

Strengthening Dairy Ties: A Landmark Step for U.S.–Taiwan Collaboration

Wed, 01 Oct 2025 12:06:50 GMT

The U.S. and Taiwan have taken a monumental step in enhancing their relationship within the dairy sector. The recent signing of a memorandum of understanding (MOU) between the U.S. Dairy Export Council (USDEC), the National Milk Producers Federation (NMPF), and the Dairy Association of Taiwan (DAT) marks a significant milestone in the two countries’ ongoing partnership.

Cultivating Stronger Connections
The essence of this MOU lies in its commitment to boosting trade and defending the integrity and image of dairy products. It supports dairy farming initiatives and seeks to deepen the cooperation between the U.S. and Taiwan, especially in the areas of dairy benefits and trade enhancement. A pivotal aspect of this agreement is the exploration of opportunities designed to strengthen commercial ties between these two nations.

Krysta Harden, president and CEO of USDEC, articulates the importance of the agreement by highlighting its role as a catalyst for expanding U.S. dairy’s presence in Taiwan.

“This agreement is a significant step toward expanding the presence of U.S. dairy in Taiwan, one of the most dynamic markets in Asia,” she says, emphasizing that by bolstering the ties between the dairy industries of the two nations, new pathways for growth and innovation will emerge. This will ultimately create long-lasting benefits for both Taiwanese and American consumers and producers.

A Strategic Partnership
Gregg Doud, president and CEO of NMPF, also underlines the vital nature of this partnership, considering Taiwan’s market is experiencing growth.

“Taiwan is a growing market, and this agreement ensures that U.S. dairy is well-positioned to meet demand for high-quality dairy products in the region,” he says. This MOU is a testament to the industry’s endeavors to bring tangible value back to the U.S. dairy community through strategic exports.

The agreement was signed during a USDA-led trade mission to Taipei and is a testament to NMPF’s and USDEC’s commitment to fostering a sustainable and prosperous future for the dairy industry. By expanding their network of international allies, these organizations continue to pave the way for future collaborations that will benefit the global dairy community.

This MOU marks an essential chapter in the ongoing story of U.S.–Taiwan collaboration in the dairy sector. It holds the promise of not just strengthening economic and commercial ties, but also of elevating the role of dairy in supporting healthy diets for the consumers of both nations.

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Mixed Signals Persist, But so Does Optimism

Tue, 19 Aug 2025 14:00:00 GMT

Despite ongoing geopolitical tensions, economic uncertainty, and escalating tariffs, the past several months has been reasonably profitable for U.S. dairy farmers. They continue to benefit from adequate milk prices, elevated non-milk revenue, and lower feed costs compared to recent years. Overseas, particularly in the EU and New Zealand, many dairy commodities have seen prices surge in recent months, with some products reaching multi-year highs in mid-Q2, followed by slight price easing at recent GDT auctions. While similar price behavior has not been observed in the U.S., most products have at least established a price floor, keeping milk prices above on-farm production costs. As long as demand holds in the coming months, RaboResearch remains optimistic about the near-term future of the dairy industry.

Recent milk production data suggests that farmers have responded swiftly to capitalize on positive margins. Production was up 1.6 percent year-over-year in both April and May, the strongest growth since 2021. A larger herd, combined with improved yields (with only one new avian influenza case reported in the past 30 days), has contributed to this output strength. Despite a tight supply of replacement animals and the continued financial appeal of breeding dairy cows to beef bulls, farmers have managed to expand herd sizes to take advantage of favorable margins. The USDA revised the April herd size data upward by 15,000 cows and reported an additional 5,000 head were added in May, resulting in a net increase of 20,000 animals. At 9.445 million head, the herd size is now at its highest level since July 2021. 2025 is expected to deliver the first full-year production growth since 2021, with RaboResearch projecting an output gain of 1.5 percent to 2 percent over 2024.

Trade remains a double-edged sword. While exports to Mexico thankfully continue to flow freely under the USMCA, tensions with China have negatively impacted sales. U.S. dairy products faced a 125 percent retaliatory tariff increase from April through mid-May. Although the tariff has since been eased, the threat of re-escalation remains. Shipments of lower-protein dry whey and permeate to China fell 40 percent year-over-year in April and were down 70 percent in May. As China is the top destination for these products, such significant declines could lead to weaker dry whey and Class III prices in the coming months.

Looking ahead, RaboResearch anticipates a softening in global prices as milk production increases in most key exporting regions and demand remains fragile. To some countries, exports in some products could remain elevated as the U.S. remains price competitive, especially in cheese and butter. While the U.S. dairy sector remains generally healthy, it must navigate a complex landscape of shifting trade policies, inflationary pressures, and evolving consumer behavior to ensure continued profitability for dairy farmers this year.

RaboResearch F&A North America provides dynamic insight and value to dairy industry members, and other Rabobank clients and stakeholders. Learn more about the research reports for a competitive edge here .

U.S. Dairy Industry Calls for Action Against Disruptive Trade Practices

Tue, 29 Jul 2025 11:56:23 GMT

When it comes to global dairy trade, ensuring fair competition and market access for U.S. dairy producers remains a significant challenge. This complexity was brought to light during a recent testimony before the U.S. International Trade Commission (USITC) by Jaime Castaneda, executive vice president for policy development and strategy for U.S. Dairy Export Council (USDEC) and National Milk Producers Federation (NMPF), and Will Loux, senior vice president for global economic affairs. Their discussions highlighted the pressing need for the U.S. government to address international policies that disrupt markets and harm American dairy interests.

The Core of the Challenge: Trade-Distorting Policies
Throughout the USITC hearing, Castaneda and Loux emphasized the role of trade-distorting policies and subsidies from countries such as Canada, India, Turkey and the European Union. These policies contribute to a global market environment where artificially low-priced exports undermine the competitive position of U.S. producers. A significant portion of their testimony was dedicated to addressing Canadian dairy policies, which have been identified as a major factor affecting fair competition.

Why Canada is a Focus
“The U.S. is an extremely competitive player in world dairy markets,” Castaneda says. “However, Canada’s actions are one of the major policy factors undermining fair competition in those markets. We encourage this investigation to include a focus on the full breadth of trade-distorting policies that Canada and other major suppliers employ that can undercut U.S. producers and exporters. It is critical that the United States takes to curb these anticompetitive practices during the 2026 USMCA review process.”

The Importance of the USITC Investigation
The USITC hearing is part of an ongoing investigation into the global nonfat milk solids market, initiated at the request of the U.S. Trade Representative. This inquiry aims to analyze the government policies affecting production and exports, with a keen eye on those maintained by Canada and other major dairy suppliers. Both the NMPF and USDEC have advocated for such investigations to curb Canada’s continued attempts to bypass its trade commitments. USTR’s initiation of this investigation was a key step in that direction.

The Broader Impact of Unfair Trade Practices
During his remarks, Loux provided statistics illustrating the scale of the issue. For example, Canada’s exports of protein concentrates and isolates have significantly increased since the implementation of USMCA, while India’s subsidized SMP exports reached substantial levels, outcompeting global prices. Similarly, Turkey’s relentless increase in whey exports further complicates the competitive landscape for U.S. dairy producers in crucial markets like Southeast Asia and China.

“Canada’s exports of protein concentrates and isolates have more than doubled since the implementation of USMCA,” Loux said in his remarks. “India’s subsidized SMP exports were as high as 45,000 metric tons in 2021 and were sold at a 10% discount compared to the global average. Turkey’s whey exports, which have quadrupled in the last two years by selling at roughly half the global average, are increasingly moving beyond the Middle East and into critical export markets for U.S. manufacturers, including Southeast Asia and China. It is essential that the United States push back against dishonest trade practices and ensure that U.S. dairy producers can compete on a level playing field around the world.”

Charting the Path Forward
As the USITC is scheduled to submit its report by March 2026, USDEC and NMPF are dedicated to leveraging the upcoming USMCA Review process. Their goal is to ensure U.S. dairy producers not only gain promised market access but also fully benefit from international trade agreements. By addressing these trade challenges head-on, the aim is to foster an environment where U.S. dairy producers can thrive on a global stage.

This commitment reflects a broader strategy to protect and promote the interests of U.S. dairy within the global market, ensuring fair play and reinforcing America’s competitive edge in dairy trade dynamics.

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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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Navigate the Winds of Change: Uncertainty and Opportunity in the Global Dairy Economy

Tue, 01 Jul 2025 15:19:31 GMT

In today’s rapidly evolving global economy, businesses and consumers are grappling with unprecedented uncertainty. At the 2025 Global Dairy Conference in Chicago, Ill., Cara Murphy, senior manager of market intelligence with High Ground Dairy, highlighted key issues shaping our dairy economic landscape.

Trade Volatility and Geopolitical Risks
The year 2025 kicked off with significant trade volatility, exacerbated by geopolitical tensions.

Murphy points out regions such as the U.S., Canada, Mexico and China have been hit the hardest. Trade-driven fragmentation and global uncertainty continue to drive down growth. The United Nations reported a decline in global foreign direct investment, predicting further decreases as geopolitical risks mount. Furthermore, the World Bank warned the 2020s could be the slowest decade for global economic growth since the 1960s.

Murphy shares the recent geopolitical events have further fueled economic uncertainty. The conflict involving the U.S. and Iran, particularly concerning the Strait of Hormuz — a critical pathway for 20% of the world’s oil supply — led to unexpected fluctuations in oil prices. Despite initial fears of price rises, markets shifted lower, illustrating the unpredictability of today’s economic climate.

Tariff Turmoil
The ongoing tariff wars remain a major source of instability. Talks between the U.S. and China have led to temporary truces, yet the threat of rising tariffs looms. For instance, tariffs on U.S. dairy exports to China have seen significant hikes, which could result in increased consumer prices down the line. Steel and aluminum tariffs have also risen sharply, sparking potential retaliatory actions from global trade partners.

Currencies around the world are reacting to these turbulent dynamics. The U.S. dollar is at a three-year low, affecting U.S. importers’ settlement preferences, while the Euro and Chinese Yuan are experiencing their own challenges. As transparency in economic reporting from China declines, businesses find it harder to navigate this opaque landscape.

Stephen Cain, senior director of economic research and analysis at the National Milk Producers Federation and U.S. Dairy Export Council shares detailed insights that span from global economic impacts down to the nuances of consumer behavior.

He says understanding the motivations behind these tariffs and their implications proves challenging. Different factions within this political administration hold conflicting views on trade, with strategies that seem to shift with time and circumstance. Particularly significant is the targeting of countries with trade deficits — a contentious issue marked by a series of inconsistent policies.

The rapidity with which tariffs are implemented and adjusted has lead to erratic market behavior. Cain highlights how these market fluctuations, driven by tariff announcements, create volatility in the futures market and affect dairy product prices. As tariffs on major trade partners like Canada and Mexico are applied, paused and reinstated, the industry struggles to adapt. This endless cycle of uncertainty demands a continual recalibration of market strategies.

Macro-Economic Implications
According to Cain, beyond industry-specific impacts, tariffs ripple through the broader economy. The stock market, particularly the S&P 500, has shown significant volatility in reaction to tariff announcements. Although some initial fears of economic downturn have been mitigated, uncertainty persists. Consumer sentiment — a critical barometer of economic health — has notably declined since mid-year. Though reminiscent of the COVID era, this decline is more psychological — driven by media coverage and anticipation rather than immediate financial hardship.

Tourism and Consumer Sentiment
Uncertainty extends into the tourism sector, which is a crucial component of the U.S. economy. The World Travel and Tourism Organization anticipates a 7% drop in international arrivals to the U.S., exacerbated by deflated consumer confidence. Consumer spending — a primary driver of the U.S. GDP — is vulnerable, with the wealthiest earners reining in their expenses due to fears about their future finances and job security.

“Something that’s really important when we look at currency, and specifically look at uncertainty in tariffs, is people are just losing trust in America and the USD on the side of the Euro,” Murphy says. “When think about these uncertainties, trade tensions — all of these things — long term, what does that mean? When people don’t really trust the U.S., they don’t tend to come to the U.S.”

Cain notes how media coverage on tariffs inundates consumers with narratives of economic doom and shapes their purchasing behaviors. While actual price increases from tariffs have yet to fully materialize in consumer goods, the perception of rising costs influences spending patterns significantly. This gap between current financial stability and future expectations highlights the pervasive anxiety trickling from macroeconomic discussions into personal economic outlooks.

The Silver Lining: Staying Informed and Seizing Opportunities
While this outlook may seem daunting, it is not without hope. Murphy emphasizes how staying informed will be critical. Even amid economic instability, opportunities abound for those who remain vigilant and adaptable to change. Businesses that keep abreast of shifting dynamics can capitalize on emerging trends and position themselves for success.

The current global economic landscape is marked by volatility and uncertainty. However, by understanding these challenges and remaining informed, individuals and organizations can find opportunities even in adversity. As we brace for the unknown, competition may force innovation and adaptation — ultimately resulting in long-term resilience and growth.

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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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Milk Price Futures Heat Up on Seasonal Momentum

Wed, 14 May 2025 18:50:44 GMT

Class III milk futures came to life at the beginning of the month following underlying cheese prices higher, but more importantly, a seemingly change of attitude. Class III milk futures had been under pressure since the beginning of the year and accelerated to the downside with the announcement of widespread tariffs at the beginning of February. The price increases in cheese became short-lived, with the traders uncertain over international demand. Not only was international demand a concern, but slower domestic demand also weighed on the market.

The commercial disappearance of all dairy products for 2024 was about half a percent below the previous year, and the beginning of 2025 did not look any better. The potential for continued slower domestic and international demand left prices on the daily spot market floundering. Class III futures moved later contracts to a discount to the cash prices rather than a premium, generally maintained through September or October.

The increase in cheese prices at the end of April broke out of the short-term pattern, exceeding what traders had anticipated during the spring flush. It seemed the attitude of traders began to change. Class III milk futures not only followed the higher cheese prices but also removed the discount that was held to put a premium back into the market. This magnified the increase more than the underlying cash prices would have suggested.

Class IV futures did not follow a similar pattern as the butter price remained in a sideways range. This moved some Class III contracts above Class IV, which has been unusual over the past 2 years. The Grade A nonfat dry milk price has been trending higher, but it has not been enough to ignite aggressive buying interest in Class IV futures.

We have not yet seen any significant impact on tariffs from international buyers, as some of the tariffs did not go into effect as had been feared. It will take time to see what the impact might be on overall international demand. The biggest concern will be exports of lactose and whey, as China is the largest importer of those commodities. Whey exports for the first three months of the year are 1.5% higher than in the same period last year, totaling 129,282 metric tons, with China importing 64,359 metric tons of that amount. Lactose exports for the first quarter totaled 101,017 metric tons, with China importing 28,527 metric tons. However, there has been a 90-day pause on tariffs between the U.S. and China, with tariffs dropping back to 10% over the next three months.

Hopefully, something can be worked out permanently. China has been looking elsewhere for not only whey and lactose, but other agricultural products as well, and they may continue to do that to some extent. This business may be difficult to regain completely as China builds relationships with other countries to supply its needs. Whey is an important part of the milk pricing system, and lower prices due to reduced demand would impact milk prices.

Robin Schmahl is a commodity broker with AgDairy, the dairy division of John Stewart & Associates Inc. (JSA). JSA is a full-service commodity brokerage firm based out of St. Joseph, MO. Robin’s office is located in Elkhart Lake, Wisconsin. Robin may be reached at 877-256-3253 or through the website www.agdairy.com .

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.

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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Tariffs Cast Chilling Effect Over Whey Sales

Thu, 08 May 2025 18:16:37 GMT

The U.S. trade war with China continues despite recent comments from President Donald Trump and members of his administration that suggest the U.S. could cut its current 145% tariff rate on goods from China by 50% or more. While these comments buoyed markets initially, an official from China’s Commerce Ministry called on Trump to eliminate tariffs altogether if he wants to negotiate with China.

Sarina Sharp, analyst with the Daily Dairy Report, says, “the damage high tariffs can do is very real. In the dairy complex, whey and lactose prices could be hardest hit. In fact, tariffs are having a chilling effect on both international and domestic whey sales. China is already turning to other suppliers for whey and lactose.”

In 2024, China bought 38% of all U.S. dry whey product exports and 25% of U.S. lactose exports, according to data from USDA. While early in the trade war, China granted tariff exemptions for U.S. lactose and some whey products, Beijing allowed those exemptions to lapse on Feb. 28. Today, China’s tariff on whey remains at 127%. Tariffs on food-grade whey protein concentrate are 140% and taxes on U.S. lactose products range between 130% and 135%.

“Any product that left the United States before April 9 and arrives in China before May 13 will not face these punitive border taxes, so it could take time for monthly trade data to confirm a setback in U.S.-China dairy trade volumes,” Sharp says. “Ahead of the tariffs, Chinese buyers stepped up imports of American whey products, and in March, Chinese imports of U.S. whey reached a nine-month high.”

Damage from the trade war has extended far beyond imports. Relations between Chinese buyers and American suppliers have soured, Sharp says.

“Amid growing anti-American sentiment, Chinese hosts have rescinded invitations to trade shows, and even the least patriotic buyers will eschew U.S. dairy products under the new tariff rates,” she adds.

China has turned to Europe as an alternative supplier, and as a result, European whey prices have been climbing, while U.S. prices have weakened. USDA’s Dairy Market News recently noted that U.S. buyers of whey feel a general lack of urgency to purchase whey because they are, “aware of the potentiality of more dry whey loads remaining,” in the U.S. In other words, buyers believe the steep slowdown in sales to China will provide plenty of opportunities to snap up whey at cheaper prices down the road, Sharp says.

The loss of whey exports is already having a negative impact on U.S. dairy producers’ milk checks, according to Sharp.

“Some dairy producers are buying liquid whey from cheese plants at steep discounts to feed to their cattle,” she adds. Before the tariffs, that whey was dried and shipped to China.

“As cheese and whey production climb, the U.S. dairy industry will need to maintain or grow exports to keep inventories in check,” she says. “If the U.S.-China trade war drags on, exports will suffer and whey and lactose values will likely drop again.”

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Protecting Common Food Names: A Battle Against Unfair Trade Practices

Wed, 30 Apr 2025 13:22:03 GMT

In a move applauded by key dairy industry players, the U.S. Trade Representative’s (USTR) recent decision to highlight the protection of common food names in its 2025 Special 301 Report has received significant attention. The Consortium for Common Food Names (CCFN), National Milk Producers Federation (NMPF), and U.S. Dairy Export Council (USDEC) have voiced their support, recognizing the USTR’s efforts to spotlight these crucial intellectual property concerns on a global scale.

The Threat of Geographical Indications
The issue at hand is the European Union’s sustained campaign to monopolize common food names such as Parmesan and feta via protectionist geographical indication (GI) policies. These policies aim to restrict the use of these widely recognized food and beverage terms solely to specific European producers, thereby cutting off U.S. producers from important markets. This protectionist stance is seen as a direct barrier to fair competition, one that intentionally limits market access for U.S. and international producers.

“The European Union’s approach to geographical indications is entirely unacceptable,” stated Jaime Castaneda, executive director of CCFN and NMPF’s executive vice president for policy and strategy. “Too many trading partners have been coerced into imposing trade barriers for products using common food and beverage names. We appreciate USTR’s ongoing recognition of this issue but urge the U.S. government to stop trading partners from succumbing to European pressures and imposing trade barriers on U.S. products.”

A Call for Fair Trade Practices
Krysta Harden, president and CEO of USDEC, emphasized the unfairness of these practices.

“Europe’s misuse of geographical indications is nothing more than a trade barrier dressed up as intellectual property protection. It not only unfairly strips American producers of the right to use common, widely understood terms, but significantly handcuffs commercial export opportunities,” she says. “We welcome USTR’s focus on this issue and appreciate the administration’s dedication to protecting U.S. market access rights.”

The Economic Implication
Gregg Doud, president and CEO of NMPF highlights the economic implications are substantial.

“Last year, the United States imported nearly $3 billion more in dairy products from the European Union than we exported to Europe. Europe’s abuse of the GI system is a significant reason for that deficit,” he said. The EU’s GI schemes, creating a biased two-tiered system, privilege European producers while eliminating competition. Doud looks forward to working with the USTR to level the playing field for U.S. dairy producers.

Actions Taken and Forward Steps
In an effort to combat these challenges, CCFN submitted comprehensive comments to the agency in January, highlighting the markets where U.S. dairy producers’ rights to use common names are under threat. These comments were supported by NMPF and USDEC, who emphasized the urgency for action on this pressing trade barrier. Shawna Morris, CCFN’s senior director, reinforced these concerns at a USTR hearing, underscoring the misuse of geographical indications by the EU and the imperative need for the U.S. government to counter these efforts.

The fight to protect common food names is not just about preserving traditional terminologies; it’s about securing fair competition and supporting U.S. agriculture in the global marketplace.

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The Butterboom: Understanding Trends in Dairy and Butterfat Exports

Tue, 29 Apr 2025 20:20:58 GMT

In recent times, the dairy industry has witnessed an intriguing trend: butterfat exports are running at more than double the pace compared to the past two years. This is an impressive growth trajectory, and it raises important questions about the potential future of butterfat supply.

Navigating Milk Production Trends
Milk futures have tried to increase in recent weeks as there seemed to be growing support from the underlying cash. However, increasing milk output as the spring flush continues leaves processing plants with sufficient milk supplies for demand. Some reports from plants indicate their milk supplies are tight, but that seems to be confined to some areas. Spot milk prices last week were as much as $7 below class in the Central region, with the increasing milk supply needing to be moved, and a discounted price is the result.

The increase in milk production has been higher than anticipated. March milk production was 0.9% higher than March 2024. One reason was the increase in cow numbers of 8,000 head from February, with the nation’s dairy herd at 9.40 million head, up 57,000 head from a year ago, but also a 6-lb. increase in milk production per cow from a year ago. The increase in cow numbers was not completely unexpected, as culling slowed from a year ago. In fact, March dairy cattle slaughter showed reduced culling compared to the previous year for the 19^th consecutive month. The increase in milk production per cow has been the surprise. This combination will keep a sufficient milk supply available and make buyers less aggressive in the spot market.

Butter: The Market’s Pivotal Player
Butter has been the topic of conversation as the price declined since the beginning of the year and stabilized since early March, trading in a sideways range. This was not like a year ago, when the butter price increased from the beginning of the year until it peaked in early September. Demand was good, and the cream supply was not quite as abundant as it has been this year.

Butterfat exports ran below 2023 for the first three months of 2024 before outpacing the previous year, yet the price of butter increased. Exports began to rise above the previous year in June 2024 and remained that way through the rest of the year. However, when the price peaked in early September, it fell dramatically through the end of the year. The butter price in 2023 remained sideways, ranging from $2.32 to 2.45 for much of the first half of the year before increasing dramatically, reaching a record high of $3.50 in October. Butterfat exports were below the previous year during the entire year. The butter market is currently showing the opposite of the past two years, with exports more than double the volume of 2024 and 2023. It makes one wonder whether butter is a sleeping giant that will awaken during the summer.

The Future Outlook of the Dairy Market
The large difference between the U.S. price and world prices will keep international demand strong despite any impact that tariffs might have, which seems very limited so far. The tariff war with China will have a limited impact on butterfat exports, as they import a limited volume. Once the butterfat content in milk declines seasonally and demand improves, the butter price could move significantly higher. We might have already seen an early indication of this as the butter inventory increased by 18.1 million pounds in March, which was lighter than usual. This put the butter inventory 4% higher than a year ago. Butter inventory in January was 9% above a year earlier, with inventory in December 2024 at 11% above a year earlier. It will be interesting to see how this develops as the year progresses.

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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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Navigating the Tariff Tightrope When it Comes to Dairy Products

Dairy Industry Says New Tariffs Could Be A 'Useful Tool’ For Negotiating

Thu, 03 Apr 2025 15:48:08 GMT

President Donald Trump unveiled a series of tariffs on Wednesday afternoon during his “Make America Wealthy Again” event in the White House Rose Garden.

Using his International Emergency Economic Powers Act authority, he announced the U.S. will impose a 10% tariff on all countries that will take effect April 5, 2025, at 12:01 a.m. EDT.

President Trump will also impose an individualized reciprocal higher tariff on the countries with which the U.S. has the largest trade deficits to take effect April 9, 2025, at 12:01 a.m. EDT. All other countries will continue to be subject to the original 10% tariff baseline.

During the event, which was broadcast live across the U.S. and abroad, President Trump held up a chart showing specific countries in line for what he described as reciprocal tariffs.

“ We will charge them approximately half of what they are — and have been — charging us,” he said. “So, the tariffs will not be a full reciprocal. I could have done that, I guess, but it would have been tough for a lot of countries.”

Dairy Industry Weighs In On Announcement
Gregg Doud, President and CEO of the National Milk Producers Federation, said the Executive Order provides more clarity on the administration’s approach to reciprocal tariffs and could be a net positive for U.S. dairy producers.

“Tariffs can be a useful tool for negotiating fairer terms of trade,” Doud said, in a prepared statement. “To that end, we are glad to see the administration focusing on long-time barriers to trade that the European Union and India have imposed on our exports. The administration has rightly noted both countries’ penchants for restricting sales of American products.

“In fact, 20% reciprocal tariffs are a bargain for the EU considering the highly restrictive tariff and nontariff barriers the EU imposes on our dairy exporters,” Doud added. “If Europe retaliates against the United States, we encourage the administration to respond strongly by raising tariffs on European cheeses and butter. We also appreciate the president’s recognition of the sizable barriers facing U.S. dairy exports into the Canadian market.”

Krysta Harden, president and CEO of the U.S. Dairy Export Council, gave added perspective on the new tariffs being rolled out, specific to the European Union and India.

“A firm hand and decisive approach to driving changes is most needed with the European Union and India to correct their distortive trade policies and mistreatment of American agriculture including both imbalanced tariff barriers and nontariff choke-points such as the misuse of Geographical Indications to block sales of our cheeses,” she said, in a prepared statement.

Both Harden and Doud noted that the majority of U.S. trading partner relationships for dairy are positive ones. “This includes many of the countries that will see higher tariffs imposed on them,” Harden said. “We encourage the administration to work swiftly with these constructive partners to negotiate new trading terms that expand opportunities for U.S. exports and secure the elimination of both tariff and non-tariff barriers.”

A partial list of the countries Trump highlighted during his remarks and the tariff percentages to be imposed include:

China - 34%
European Union - 20%
Vietnam - 46%
Taiwan - 32%
Japan - 24%
India - 26%
South Korea - 25%
Thailand - 36%
Switzerland - 31%
Indonesia - 32%

Reciprocal tariffs laid out by President Trump.

(The White House )

Grain Growers Brace For More Financial Pain

Potentially caught in the middle of the new tariff battles are those farmers who produce grain and cattle. That describes Chase Dewitz, who weighed in on the tariffs on Wednesday. His family operation includes more than 34,000 acres of pasture, row crops, 1,500 head of beef cows and a feedlot. His current concerns revolve around grain.

“I think there’s going to be some pain here for a while, and the biggest thing is these export markets. We have handed China to Brazil, and we’re just pushing them away more and more, and we’ve allowed this to happen,” said Dewitz, who is based in central North Dakota, near Steele.

During the 2018 trade war with China, U.S. agriculture experienced more than $27 billion in losses, according to the American Soybean Association.

The association says the U.S. has yet to fully recover its former market share of soybean exports to China, the world’s No. 1 buyer of the commodity .

“The policies of the last 30, 40, 50 years have just pushed this thing so far,” Dewitz said. “And without some major pain, I don’t know how you reset that.”

Other grain growers expressed similar nervousness about tariffs and declining optimism in the Purdue University-CME Group Ag Economy Barometer for March. Forty-three percent of the farmers surveyed cited shifting trade policy as the No. 1 driver of their negative outlook.

In addition, farmers were pessimistic about the outlook for the future of ag export markets, particularly for grain. Five-year expectations for U.S. exports reached an all-time low for the survey, according to James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture.

A recent AgWeb poll that found more than half of farmers don’t support Trump’s use of tariffs .

Dewitz said U.S. farmers want changes that will bring about fairer trade agreements but no one likes financial pain.
“Everyone says, ‘this needs to be fixed,’ and then on the backside they say, ‘as long as it doesn’t affect me,’” he said. “Well, it’s going to affect everybody.”

Listen to the full conversation with farmers on “AgriTalk” here: Farmer Forum - AgriTalk

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The 5 Big Market Trends Dairy Farmers Need to Keep Their Eye on this Year

Fri, 28 Mar 2025 19:10:59 GMT

Dairy farmers are facing a fast-changing market in 2025, with trade wars, tariffs, and export shifts shaking up the industry. From fluctuating feed costs to unpredictable milk prices and new cheese processing capacity, one thing has become clear in the first quarter—staying flexible is key to managing risk and finding opportunities.

Sarina Sharp, a dairy market analyst for the Daily Dairy Report, emphasizes the challenges ahead.

“These are pretty wild times in markets of all kinds, and the dairy markets are not immune from that,” she says.
Sharp, along with Katie Burgess, director of risk management at Ever.Ag, breaks down the top five market trends dairy farmers should keep an eye on for the rest of the year.

Feed Costs: An Opportunity to Lock in Prices
With spring planting on the horizon, feed costs have been an area dairy farmers are switching their focus towards. According to Sharp, corn acres are expected to increase while soybean acres decline.

“Corn should be relatively inexpensive, but in these wild markets, I would advise dairy producers, when they do see prices start to fall back, to just start buying some of next year’s corn, get those prices locked in,” she suggests.

Soybean and soybean meal prices are currently at multi-year lows, creating an opportunity for producers to secure affordable feed.
“I am relatively bearish on the soybean markets, but we do have lower acres,” Sharp adds. “It’s wise to start buying some soybean meal now while prices are favorable.”

Feed costs are one of the largest expenses for dairy producers. While 2025 is expected to bring opportunities for cost savings in feed, farmers should remain cautious about market volatility. Weather conditions, global trade policies, and geopolitical issues can still disrupt these projections. Farmers who secure their feed needs early may have a competitive edge if markets become unpredictable later in the year.

Class III Milk Prices: A Risk of Decline
Milk prices, particularly in the Central Plains, are another area of concern. Sharp warns that Class III milk prices could see a significant setback.

“We are starting to see cow numbers and milk production climb, and a lot of that milk is going into cheese, particularly cheddar, which is the price that determines our Class III milk” she notes.

The fate of cheese exports will also play a crucial role in determining milk prices.

“We’ve got a lot of uncertainty on the trade front. We need big cheese exports if we’re going to make more cheese. If we start to lose those, then the cheese and Class III prices will probably drop back,” Sharp explains.

Dairy farmers who rely on Class III milk pricing will need to keep a close eye on cheese demand and exports. With more processing capacity coming online, increased milk production could lead to an oversupply if consumer demand does not keep pace. Risk management strategies such as hedging and forward contracting may help farmers mitigate potential losses.

Cheese Production: A Pivotal Year Ahead
Burgess highlights the critical role of cheese exports in 2025.

“For this year, exports are going to be so important because we have increased processing capacity,” she explains. “By the end of the year, we will have significantly more cheese production, so we need consumers to help us eat all this cheese.”

Forthcoming or recently completed capacity investments (2023-2026.)

(National Milk Producers Federation, Unitied States Dairy Export Council)

However, domestic cheese demand has shown signs of weakening.

“It’s getting really expensive to go out to eat, so restaurant traffic has slowed,” Burgess adds. “Grocery store cheese sales remain steady, but consumers are looking for value rather than high-end specialty products.”

With domestic demand struggling, strong cheese exports will be crucial to stabilizing the market. Adding to the uncertainty are potential trade disruptions.

“Last year was a record year for exports,” Burgess notes. “We’re off to a good start in 2025, but where we go from here will be a major driver of prices.”

This increased production capacity in the U.S. dairy industry could be a double-edged sword. While more processing plants can help create new market opportunities, it also means there is more supply to move. If global trade disputes or economic downturns reduce demand for U.S. cheese, the industry could face a supply glut, further pressuring prices.

Beef Markets: Strength with Some Vulnerabilities
Dairy producers have been benefiting from historically high beef prices, as the beef-on-dairy trend continues to add value to calves.

“I think something that’s really hopeful for dairy producers is all the income that they’re getting from the beef market,” Sharp says. “When they sell their cull cows and crossbred calves to the beef industry, it just puts a floor under the value of every animal on the farm. That’s really helpful for their bottom line, especially if we start to see the feed versus milk margins start to shrink. Having that higher beef income can backstop some of what might be red ink on the farm.”

While prices are likely to remain elevated for the foreseeable future, there are some risks on the horizon.

“If we enter into a recession, beef prices are already so high that consumers might start to feel stretched,” Sharp warns. “They may be less willing to pay top dollar for beef, which could cause markets to inch down from their lofty levels.”

Milk Supply and Risk Management: A Strategic Approach
Burgess also points out that U.S. milk production is rising.

“In February, milk production was up 1%, the strongest growth we’ve seen in a while,” she says. “Production is growing in areas with new processing capacity, but there’s also some uncertainty with ongoing animal health concerns like influenza.”

Given these moving pieces, Burgess stresses the importance of risk management.

“We don’t know what’s going to happen but protecting your bottom line through strategic planning will be critical,” she advises.

With increasing milk production, farmers should consider the impact on milk prices and the importance of risk management tools such as Dairy Margin Coverage (DMC), Dairy Revenue Protection (DRP) and Livestock Gross Margin (LGM) insurance. These programs can help mitigate price swings and provide stability in an unpredictable market.

Looking Ahead
With so many variables in play, Sharp and Burgess advise dairy farmers to be proactive in their financial and operational strategies throughout the remainder of the year.

“There’s a lot of uncertainty, but smart purchasing decisions, especially on feed costs, and keeping an eye on export markets will be key factors in staying profitable through 2025,” Sharp says.

As dairy producers navigate these challenges, staying informed and adapting to market shifts will be critical for success in the year ahead.

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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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Navigating the Shifting Tides of the Dairy Market: What 2025 Holds for Milk Prices

Wed, 19 Mar 2025 14:36:28 GMT

The U.S. dairy market is experiencing dynamic changes, influenced by various factors ranging from international trade relations to evolving consumer behaviors. Recently, Katie Burgess, the dairy market advising director with Ever.Ag, offered an in-depth examination of these ongoing developments at the Oregon Dairy Farmers Convention in Salem, Ore. Her insights shed light on the potential trajectories for the dairy industry in 2025.

The Importance of Exports for the U.S. Dairy Market
A key takeaway from Burgess’s presentation is the critical role exports play in the U.S. dairy market. In 2024, while exports started off slowly, they ultimately achieved record cheese export months, providing a crucial buffer for maintaining milk prices. Notably, cheese exports hit an all-time high last year, signaling growing global consumer interest in American dairy products—a trend particularly crucial as domestic production increases.

“This is really good news that consumers around the world are finding value in American dairy products, because as we grow here domestically, that’s going to be the key,” she said.

Impact of Tariffs on Trade Relations
The imposition of tariffs by the U.S. on countries like Canada, Mexico, and China has stirred significant repercussions, with these countries preparing retaliatory tariffs on American dairy products. This development poses a considerable risk, especially concerning Mexico, which accounted for nearly 40% of U.S. cheese exports in 2025. Burgess expressed concerns about a potential decline in export volumes to Mexico due to higher consumer costs there, although milk powder exports remain unaffected by Mexican tariffs, offering some reprieve.

“We do think that our export volumes to Mexico could be subject to pulling back a bit as they get more expensive from a Mexican consumer perspective,” she says.

Investment in Cheese Processing Capacity
Investment in the U.S. dairy industry is another critical factor at play. Significant expansions, such as the Leprino plant capable of processing 8 million pounds of products daily and the Valley Queen expansion in South Dakota, are set to elevate cheese production capacity further. Burgess points out the possible consequences of this growth, cautioning that the U.S. may face an abundance of cheese if exports do not keep pace. This situation could necessitate an increase in domestic cheese consumption, which typically grows by 1-2% annually.

“If we can’t get the cheese exported, and we’re making a lot of it, it means we’re going to need to eat a lot more cheese,” she says.

Consumer Behavior Trends in a Shifting Economy
Amidst these industry shifts, consumer behavior is also evolving. As food inflation impacts U.S. households, there is a noticeable trend towards reduced eating out, with more people opting for home-cooked meals. This shift, observed since 2024, persists into 2025 and drives increased grocery sales.

“It’s part of a continued trend that we saw across 2024 less foot traffic into food service. Grocery sales looked pretty solid as people rotated to eating at home. And this has really continued here into 2025, I think, with the uncertainty in the economy right now,” she says.

Predictions for Milk Production in 2025
Looking forward, milk production is forecasted to rise this year despite previous contractions in supply, partly due to factors like HPAI in key states like California. However, the dairy sector faces a unique challenge as the expected number of dairy heifers calving in 2025 reaches its lowest point in over 20 years. This production increase will likely vary across regions with new processing plant capacities.

“So even though our forecast shows milk production will grow this year, I think it’s going to be kind of a mixed story that we expect milk to grow in spots with new plant capacity,” she shares.

Risk Management Amidst Uncertainty
Given the pervasive uncertainties symbolizing the current economic climate, Burgess emphasizes the need for rigorous risk management strategies. Over the last decade, Class III prices often surpassed $19 per hundredweight, but at least once each year, market prices dipped below $16 per hundredweight. For many, a breakeven point higher than $16 necessitates protective measures to manage risks when prices fall. As Burgess aptly notes, “Hedging is not gambling. Hedging is when we take risk away.”

As we navigate the milk market’s changing dynamics in 2025, stakeholders must remain vigilant and proactive. Strategic investments, diversification of export markets, and effective risk management will be essential strategies to harness opportunities and mitigate challenges within this complex and evolving industry landscape.

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Is there Hope for Higher Milk Prices?

Tue, 18 Mar 2025 12:00:00 GMT

Many commodity markets have been unpredictable lately due to the volatility of the equity markets and the uncertainty over the impact of tariffs. Trend traders do not like uncertainty, which leaves much of the activity being short-term trades as traders scalp the market in hopes of making a quick profit. However, that can become difficult as well.

The dairy markets had been under pressure for about a month before it seemed prices had reached the bottom and had more than factored in any impact that could come from tariffs. This resulted in a three-day rebound in cheese prices and milk futures. It was hoped the market would break the pattern that had been prevalent for a few months of short-lived price rallies. Those hopes were dashed as milk futures fell back nearly eliminating the gains.

The buyers of cheese and butter see no need to be aggressive with prices increasing as orders need to be filled. Once the immediate needs are met, buyers become less aggressive and step back. As the buyers step back, sellers continue to bring loads to the spot market to sell as manufacturers want to limit building inventory at the plant level.

Commercial disappearance of dairy products has been running about 0.5% below a year ago. A 0.5% decrease is huge and has a significant impact on prices. The same is true in reverse. If demand is 0.5% higher than the previous year, higher prices are usually experienced.

Right now, we have slower demand compared to a year ago with spring flush nearing. It is difficult to know how much milk production will increase during spring flush. It will be higher than it has been, but it is not expected to exceed the level of a year ago. The January Milk Production report showed milk output was 0.1% above the previous year, but gains may not hold when compared to the gain during the spring flush last year. However, there are more cow numbers and an improvement in production per cow could take place. If we do see gains, those gains may be minimal. Spring flush will make more milk available to the market. The key will be if demand improves along with increasing production to keep supplies of dairy products from building.

Fluid milk sales have been struggling for years, with the combination of conventional and organic milk running below the previous year most months. There have been reports of fluid milk consumption improving recently, but January fluid milk sales were 0.5% below January 2024. The positive aspect is that butter and cheese consumption continues to grow.

Cheese and Butter Consumption

(USDA)

Not only has domestic consumption grown, but also international demand. Cheese exports in January totaled 46,680 metric tons, up 22 percent from January 2024. Butterfat exports jumped 145 percent from a year earlier totaling 7,101 metric tons.

There are aspects of the market that could result in higher prices as the year progresses, but the market now needs to prove that higher prices will be necessary.

Robin Schmahl is a commodity broker with AgDairy, the dairy division of John Stewart & Associates Inc. (JSA). JSA is a full-service commodity brokerage firm based out of St. Joseph, MO. Robin’s office is located in Elkhart Lake, Wisconsin. Robin may be reached at 877-256-3253 or through the website www.agdairy.com .

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

The US–Canada Dairy Trade Dispute: Unraveling the Complexities

Thu, 13 Mar 2025 17:44:28 GMT

In recent years, the U.S.-Canada trade relationship has been under scrutiny, particularly regarding dairy exports and tariffs. This complex issue recently became a significant talking point after President Donald Trump pointed out Canada imposes tariffs exceeding 200% on certain U.S. dairy products. However, there’s much more to this narrative than meets the eye.

The Fine Print Behind High Tariffs
While President Trump’s statements highlight stark figures, the context reveals a nuanced picture. These high tariffs are not immediate; they take effect only after U.S. dairy exports surpass a certain quota, negotiated under the United States-Mexico-Canada Agreement (USMCA). As it stands, the U.S. has yet to reach this quota in any category of dairy products, with many categories, such as milk, not even reaching half of the zero-tariff maximum.

The Senators’ Stance on Compliance
A bipartisan group of senators, including Tammy Baldwin, Roger Marshall and Joni Ernst, have expressed concerns about Canada’s adherence to USMCA guidelines. Despite new provisions in the trade agreement, they emphasize Canada continues to fall short in market access for U.S. products. The senators’ letter to U.S. trade and agriculture secretaries urged congress to address these “long-standing issues” that hinder U.S. dairy exports.

“Historically, Canada has failed to live up to its commitments to provide access to its market; this remains the case even with new provisions in USMCA. In addition, Canada appears to be evading USMCA disciplines designed to deal with excessive protein exporting at artificially low prices,” wrote the senators in a letter to U.S. Trade Representative Jamieson Greer, Commerce Secretary Howard Lutnick and Department of Agriculture Secretary Brook Rollins. “In upcoming negotiations with your Canadian counterparts, particularly those regarding USMCA, we ask that you address these longstanding issues that harm the United States’ ability to export dairy products.”

The senators noted the dairy sector in Canada operates under strict and predetermined circumstances. These include limits on production, pre-set prices and restricted imports, in order to guard the country’s supply management system.

The Canadian dairy industry operates under a tightly regulated system characterized by production limits, fixed prices and import restrictions. While recent trade agreement changes are aimed at easing access, lawmakers argue Canada has exploited loopholes to continue its trade-distorting practices. One major point of contention is Canada’s export of dairy proteins at low prices, undermining global markets crucial to the U.S.

Industry Response to Potential Tariff Increases
Becky Rasdall Vargas of the International Dairy Foods Association acknowledges the accuracy of Canada’s high tariffs, noting these only activate upon reaching designated export quotas. Despite the U.S.'s efforts, no such quota has been met due to Canada’s protective trade measures, which conflict with their USMCA commitments. While acknowledging the progress set by the Trump administration, Vargas warns against a prolonged tariff war, urging a swift resolution to the protectionist issues harming American producers.

“U.S. dairy is grateful for the Trump administration’s efforts to hold Canada accountable on these protectionist measures. At the same time, a prolonged tariff war with our top trading partners will continue to create uncertainly and additional costs for American dairy farmers, processors, and our rural communities. We urge Canada and the United States to negotiate a resolution to these issues – both Canada’s trade barriers to U.S. dairy exports and the tariffs – as expeditiously as possible,” she said in a press release statement .

The ongoing discourse between the U.S. and Canada signifies a critical need for diplomatic negotiations to resolve these trade barriers. The impact of these issues extends beyond tariffs, affecting American dairy farmers, processors and rural communities.

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Trump Sows Confusion on Tariffs for Canada and Mexico, Floats 25% Duty for EU Goods

Wed, 26 Feb 2025 21:25:23 GMT

U.S. President Donald Trump on Wednesday raised hopes for another month-long pause on steep new tariffs on imports from Mexico and Canada, saying they could take effect on April 2, and floated a 25% “reciprocal” tariff on European cars and other goods.

A White House official, however, said Trump’s previous March 4 deadline for the 25% tariffs on Mexican and Canadian goods remained in effect “as of this moment,” pending his review of Mexican and Canadian actions to secure their borders and halt the flow of migrants and the opioid fentanyl into the U.S. Trump sowed confusion during his first cabinet meeting on Wednesday, when he was asked about the timing for the start of the duties for Canada and Mexico and replied that it would be April 2.

“I have to tell you that, you know, on April 2, I was going to do it on April 1,” Trump said. “But I’m a little bit superstitious, I made it April 2, the tariffs go on. Not all ofthem but a lot of them.”

Trump’s comments prompted jumps in the value of the Canadian dollar and Mexican peso versus the greenback.

Canada’s Finance Ministry and Mexico’s Economy Ministry both declined to comment on Trump’s remarks.

U.S. Commerce Secretary Howard Lutnick said the fentanyl-related actions were paused for 30 days but referred to “overall” tariffs on April 2. He did not specify whether the March 4 deadline was still in effect.

“So the big transaction is April 2, but the fentanyl-related things, we’re working hard on the border,”
Lutnick said during the cabinet meeting. “At the end of that 30 days, they have to prove to the president that they’ve satisfied him in that regard. If they have, he’ll give them a pause, or he won’t.”

EU Tariff Rate

Trump has targeted early April for imposing reciprocal tariffs that would match the import duty rates of other countries and offset their other restrictions. His trade advisers consider European countries’ value added taxes to be akin to a tariff.

Trump, asked whether he has decided on a tariff rate for goods from the European Union, replied: “We have made a decision, and we’ll be announcing it very soon, and it’ll be 25%, generally speaking, and that’ll be on cars, and all of the things.”

He said the EU is a “different case” from Canada and takes advantage of the U.S. in different ways.

“They don’t accept our cars. They don’t accept, essentially our farm products,” Trump said, adding that the EU was formed “in order to screw the United States.”

Roberta Metsola, president of the European Parliament, is in Washington and will meet U.S. lawmakers on Wednesday, a spokesman said. She is not slated to meet with any Trump administration officials.

New U.S. Trade Representative Confirmed

Also on Wednesday, the U.S. Senate voted 56-43 to confirm Jamieson Greer as Trump’s new U.S. Trade Representative, putting a veteran of the Republican president’s first-term trade wars fully on the job.

Greer, who served as chief of staff to former USTR Robert Lighthizer, won the support of five Democrats, including both senators from Michigan, the center of the U.S. auto industry.

Trade groups welcomed Greer’s confirmation, lauding his commitment to consulting with industry and standing up for U.S. businesses, farmers and workers. “We share Ambassador Greer’s desire for an active and pragmatic trade policy that creates

U.S. jobs and more resilient supply chains,” said Jake Colvin, president of the National Foreign Trade Council.

Greer told senators during his Senate confirmation hearing that he wanted to quickly renegotiate the U.S.-Mexico-Canada Agreement on trade to ensure China does not use it as a back door to the U.S. market to avoid other tariffs.

“Right out of the gate, I expect that we’ll be taking a second look at the USMCA,” Greer said.

Asked what changes he would like to see in the pact, Greer zeroed in on further tightening automotive content rules.

“I think we should look at the rule of origin for automobiles and aerospace and other things to look and see if we need to have any kind of restriction on content or value added from foreign countries of concern, or non-market economies,” he said, using language that U.S. trade officials often use to describe China.

(Reporting by David Lawder and Andrea Shalal; additional reporting by Bo Erickson and Ryan Jones in Washington, Brendan O’Boyle in Mexico City and Ismail Shakil in Ottawa; Editing by Dan Burns, David Gregorio and Paul Simao)