U.S. Agriculture Tariffs

USDA Deputy Secretary Stephen Vaden Says High-Level Washington Meeting Puts Fertilizer Industry on the Spot

Fri, 17 Apr 2026 20:10:03 GMT

The fertilizer market has been a growing point of tension in agriculture for years, but USDA Deputy Secretary Stephen Vaden says recent meetings in Washington marked a more direct and wide-ranging confrontation between federal officials and the companies that dominate input supply. Those discussions, he says, were not limited to USDA alone but included a broader slice of the administration’s economic leadership, signaling how central fertilizer costs have become to the national conversation on food production and inflation.

Vaden says cabinet-level officials from the Department of Commerce and the U.S. Trade Representative were present, alongside USDA leadership and state agriculture commissioners from Iowa and Georgia. Fertilizer executives were also in the room, making the meeting a rare setting where policy makers, regulators and industry leaders sat together to address pricing, supply constraints and long-term market structure.

He says the purpose was not simply informational, but confrontational in the sense of putting real-world farm impacts directly in front of industry decision-makers.

“It was an opportunity for those other cabinet officials to hear from the fertilizer company executives,” Vaden says, “and for those fertilizer company executives to hear from the secretary and me, as well as our two state counterparts who joined, about the real harm that farmers are facing from uncertainty in the market and, equally as importantly, years of elevated prices.”

Vaden says what often gets lost outside agriculture is that the current fertilizer environment is not a short-term disruption, but the continuation of a multi-year pricing trend that has reshaped farm budgets.

“For people who don’t pay attention to ag every day like your listeners do, they may think this fertilizer thing came out of nowhere,” Vaden says. “But American farmers know that we’re on year five or more of elevated prices for fertilizer, and questions about adequate supply of all fertilizer types.”

He adds that the timing of the discussions is critical, as global geopolitical tensions are only adding pressure to already strained markets.

“So I see this as an opportunity now that the attention of everyone is focused on fertilizer, not just agriculture, to begin to solve the problem that has taken years to develop and that has been exacerbated by the current situation in the Middle East,” Vaden says. “So that we don’t find ourselves in another long-term question about fertilizer supply going forward.”

USDA Pushes Industry: Bring Projects Forward or Explain the Bottlenecks

As discussions continue with fertilizer companies, Vaden says USDA is shifting the conversation from general concern to specific accountability. Rather than broad discussions about market conditions, he says officials are now asking companies to identify concrete projects that could increase supply and to explain why those investments have not yet materialized.

This approach, he says, reflects a broader strategy inside the department to move beyond analysis and toward action, particularly in areas where supply constraints have persisted for years without meaningful change.

In meetings held both jointly and separately with industry leaders, Vaden says USDA has been consistent in its message to fertilizer companies.

“We are saying the same thing to everyone who comes before the department,” Vaden says. “Be a part of the solution, don’t be a part of the problem.”

He says that includes detailed questions about whether expansion projects are already in development but stalled due to permitting delays, regulatory barriers or capital constraints. In some cases, he says, USDA is asking companies to identify where federal or state action could realistically speed up timelines.

“We are asking them what projects they have in the pipeline that they can bring on board to create new fertilizer supplies, hopefully here domestically, but if necessary, near-shoring overseas,” Vaden says. “And are there steps that we can take to make those projects move faster? Are there permits that are held up? Are there states or localities that are holding up their expansions? Are there investments that they are looking for with regard to needing capital to be able to expand their production capacity?”

He adds the department is not approaching the issue passively, but actively pressing for answers.

“We’re asking as many questions as we are making declarative statements, and we’re trying to see what levers we can pull to get more supply on the market,” Vaden says.

Market Concentration at Center of USDA Concerns

Beyond supply timelines and permitting issues, Vaden says one of the core structural concerns in fertilizer markets is the level of consolidation, particularly in phosphate production where a small number of companies control a dominant share of supply.

He says that level of concentration raises fundamental questions about how prices are formed and whether farmers are receiving signals that reflect true market conditions.

With that in mind, Vaden says USDA is focusing heavily on competition and price discovery as part of its broader review of input markets.

“With one of our fertilizer markets, there are two companies that control 90% market share,” Vaden says. “Anybody, I don’t care whether it’s fertilizer or what any other commodity you want to talk about, if there are only two major players, how can anyone be sure that the price you are paying reflects actual market conditions?”

He says the issue is not simply about individual price spikes, but about whether enough competition exists to keep pricing behavior transparent and responsive.

“In order to have adequate price discovery in a market, you need multiple players,” Vaden says.

That concern, he adds, is one of the reasons fertilizer investigations already underway by federal agencies predate recent geopolitical disruptions and continue to expand.

Vaden Details Heated Meeting With Mosaic: “A Different Tune in My Conference Room”

Among the most pointed parts of Vaden’s interview are his comments about a recent face-to-face meeting with Mosaic, one of the most influential players in the phosphate fertilizer market. He says the discussion, held in his conference room just this week, was direct and, at times, uncomfortable, focusing heavily on production decisions, capacity investment and the company’s role in a highly concentrated global market.

Vaden says he challenged Mosaic on why additional production capacity has not been brought online in the United States over a long period of time, and what barriers the company believes are preventing expansion.

He says he left the meeting with clear expectations for follow-up information from the company, describing it as an assignment rather than a casual discussion.

“I gave them a homework assignment,” Vaden says. “I told them what I expected to see, and I hope that they will get back to me as soon as possible.”

But what stood out most to him, he says, was not just what was said in the room, but how it contrasted with the company’s public messaging.

So disappointed in this response, @MosaicCompany, especially as you decide to idle two fertilizer production facilities, removing 1 MMT of supply from the world market. 🚨

Our Great President and this Administration have our farmers' backs. 💪🌾

Any sleight of hand will not be… https://t.co/GTCxcBQNgi
— Secretary Brooke Rollins (@SecRollins) April 13, 2026

In his view, there was a noticeable difference between internal discussions and external communications, particularly on social media, where fertilizer policy debates have increasingly played out in public.

“And I will say, without being able to go into details, when they were in my office, they were singing a slightly different tune than they were signing on Twitter responding to the president’s Truth Social message that you noted,” Vaden says.

He uses that contrast to underscore what he sees as a broader disconnect between industry messaging and the realities USDA believes farmers are facing.

“We need more supply, we need answers, your company hasn’t provided either of those two things,” Vaden says. “It’s about time that you did.”

Industry Responses, Trade Policy Pressure and the Mosaic Question

While Vaden applies pressure to Mosaic, he notes that not all fertilizer companies are taking the same stance on trade policy and tariffs. He points specifically to Nutrien, which he says has indicated support for removing certain trade enforcement measures.

“I was very happy after I met with the Nutrien CEO that they came out and announced we don’t need this CVD order anymore,” Vaden says.

By contrast, he says Mosaic’s position on countervailing duties and phosphate trade enforcement remains unresolved, and that broader policy decisions are now effectively waiting on the company’s response.

He characterizes the situation as fluid but heavily dependent on industry input.

“Right now the question is in Mosaic’s court, if you will,” Vaden says. “And we’re waiting for an answer from them.”

He adds that regulatory or executive action is unlikely to be taken in a vacuum while negotiations and responses are still unfolding.

“One thing that I know as a lawyer is that there’s a whole lot more possible if you have consent of the parties than if you don’t,” Vaden says. “With consent, nearly all things are possible.”

Investigations Expand as USDA Seeks Farmer-Reported Data

Alongside industry meetings, Vaden says USDA is working with the Department of Justice and Federal Trade Commission on ongoing fertilizer market investigations, with a particular focus on pricing behavior and market transparency.

He says one challenge is the nature of pricing information itself, which often reaches farmers through informal channels and can change quickly.

“We’re asking questions and waiting for answers, and we need farmers’ help as part of our question asking,” Vaden says.

He describes a pattern many farmers have reported directly to USDA, where fertilizer prices are quoted in a way that encourages immediate purchase rather than delayed buying.

“I know in my own family’s operation that you get phone calls, and those phone calls tell you ‘Here’s what the price is now, and if you wait, here’s what the price will be later,’” Vaden says. “And that later price is never lower than the price that it is now.”

To address that, he says USDA is working on a confidential reporting system designed to protect farmer identity while improving data quality for investigators.

“If they trust us with their information, if they trust us with the facts that they have, they’ll be able to remain anonymous,” Vaden says. “And the companies under investigation will not know who shared what data with us.”

“This Has Been Going On for Too Long”

Vaden closes by emphasizing that fertilizer prices and supply constraints are not a new challenge for agriculture, but an entrenched issue that has persisted through multiple years and market cycles.

He says the administration is trying to shift both short-term supply conditions and long-term structural dynamics at the same time, adding that USDA’s goal is not temporary relief, but sustained changes in supply, competition and pricing stability.

“We are focused on getting new supplies here now, and not just now, but next year and the year after that and the years after that,” Vaden says. “So that we can have guaranteed new supplies over the long term.”

Vaden’s Message to Farmers: “We’re Saying the Same Thing in Public and in Private”

At the end of the conversation, Vaden returned to what he described as the central audience for everything USDA is doing on fertilizer: farmers themselves. He acknowledged frustration is not just growing, but it has become a defining sentiment across much of farm country as input costs remain elevated and supply questions persist year after year.

He emphasized USDA’s posture is not different depending on the room or the audience, whether speaking with industry executives, other federal agencies, or producers themselves.

“I want farmers to know that when I am sitting with representatives of other cabinet departments or when I am sitting with big fertilizer CEOs, I am saying the same thing in private that you hear me saying in public,” Vaden says. “I do not change my tune. I may be slightly more polite, but I am equally as direct in terms of telling them what I think the situation is.”

Vaden says that directness is rooted in what he believes farmers are already experiencing on the ground, particularly when it comes to fertilizer pricing volatility and uncertainty in purchasing decisions. He says producers are not misreading the situation — they are responding to real, long-running pressures.

He also acknowledges the emotional toll on producers is part of the reality USDA is hearing more frequently.

“I especially communicate to them that farmers have gone from exasperation to anger with the situation that we have now,” Vaden says. “They are not wrong to be feeling those emotions because they understand that this is not a new situation.”

Looking ahead, Vaden says USDA’s goal is not just to address short-term pricing spikes, but to change the underlying conditions that have kept fertilizer costs elevated for years. That includes expanding supply, increasing competition and improving long-term stability in input markets.

“This is an issue that has bedeviled American agriculture for at least five years, and it is time that it stopped,” Vaden says.

Trump Warns Fertilizer Giants Against "Price Gouging" as Costs Soar 40%

Tue, 14 Apr 2026 15:46:56 GMT

Fertilizer market volatility is once again taking center stage as geopolitical tensions disrupt global supply lines and push input costs sharply higher. New analysis shows the increase in fertilizer prices may not be over, even if the Strait of Hormuz reopens soon.

Even with the situation in Iran pushing prices even higher, the sharp increase in fertilizer prices from 2020 to now is catching attention in Washington. Not only did President Donald Trump take to social media to warn of ‘price gouging,’ but Agriculture Secretary Brooke Rollins also posted on X Monday, specifically expressing frustration over Mosaic’s response to farmers.

While Rollins and USDA Under Secretary Stephen Vaden have raised concerns over fertilizer prices this year, the president posted on Truth Social over the weekend that he is closely monitoring fertilizer prices and pledged support for American farmers.

Trump said Saturday on his Truth Social platform he is “watching fertilizer prices CLOSELY” during what he described as the US “FIGHT FOR FREEDOM in Iran”, adding that the administration “will not accept PRICE GOUGING from the fertilizer monopoly”.

On Monday, Rollins posted on X, saying she was “So disappointed in this response” from Mosaic, “especially as you decide to idle two fertilizer production facilities, removing 1 MMT of supply from the world market.”

So disappointed in this response, @MosaicCompany, especially as you decide to idle two fertilizer production facilities, removing 1 MMT of supply from the world market. 🚨

Our Great President and this Administration have our farmers' backs. 💪🌾

Any sleight of hand will not be… https://t.co/GTCxcBQNgi
— Secretary Brooke Rollins (@SecRollins) April 13, 2026

Mosaic announced last week the decision to shut down major phosphate operations in Brazil, a move the that will cut production, reduce jobs, and signal a *strategic shift in how the fertilizer giant deploys its capital.

Mosaic Company announced Thursday it will idle two phosphate facilities in Brazil as part of a broader effort to cut costs and shift capital. Mosaic expects idling of the facilities to reduce annual phosphate production by approximately 1 million tonnes. CEO Bruce Bodine says the decision reflects what he calls a disciplined focus on long-term returns.

.@MosaicCompany, you’re right that U.S. farmers are facing a difficult economic situation, only made worse by the extra $6.9 BILLION they have had to spend on fertilizer since you petitioned the government to place duties on imported phosphorus. This has played a major role in… https://t.co/UuOqjE0jBu
— National Corn (NCGA) (@NationalCorn) April 13, 2026

Mosaic and Simplot have also been in the cross hairs of the push to remove countervailing duties on Moroccan phosphate . Groups like the National Corn Growers Association (NCGA) claim the CVDs are costing U.S. agriculture $1 billion each year.

The CVDs on Moroccan phosphate were put into place by the International Trade Commission (ITC) in 2021. As the sunset review begins, more than 50 state grower groups including the Texas Corn Producers Association, sent a letter to the U.S. Department of Commerce and the ITC to revoke the countervailing duties on imported phosphate fertilizers from Morocco and Russia.

In separate filings by Mosaic and Simplot to the ITC and the Department of Commerce, both companies said the continuation is necessary to maintain a “level playing field.”

In a written response to Farm Journal, Mosaic said:

“American farmers depend on a strong domestic fertilizer industry, which in turn depends on strong enforcement of U.S. trade laws that ensure a level playing field. Mosaic is proud to support U.S. agriculture with high-quality, reliable products produced here at home.”

Iran War’s Current Impact on Fertilizer Prices

The message from the Trump adminstration comes as tensions escalate in the Strait of Hormuz, where the United States is weighing a potential full naval blockade. Ship traffic through the critical waterway has already dropped from roughly 135 vessels per day to the single digits. A complete shutdown could halt flows entirely, further increasing fertilizer prices.

The stakes are high as roughly one-third of global fertilizer shipments move through the strait, and the disruption is already sending prices higher, up more than 40% compared to a year ago.

It is the 6-week anniversary of the closure of the Strait of Hormuz. Fert price comparisons:

NOLA urea - +$230 or 49%
NOLA UAN - +$145 or 38%
Midwest NH3 - +$245 or 32%
NOLA DAP - +$130 or 21%
NOLA potash - +$10 or 3%

...corn - 2-cents or 0.5% higher#sickeningforfarmers
— Josh Linville (@JLinvilleFert) April 10, 2026

Market data shows the impact Iran is having on already high fertilizer prices. According to StoneX analyst Josh Linville says in the six weeks since the war started:

Urea prices have surged by $230 per ton, a 49% increase
UAN is up $145 per ton, or 38%
Anhydrous ammonia has climbed $245 per ton, a 32% jump.
In contrast, corn prices have barely responded, rising just two cents, or about half a percent. The divergence is putting additional pressure on farm margins.

DOJ Probe Into Fertilizer Costs Seeks Input From Farmers

The Trump administration is asking farmers to help provide information as part of an ongoing U.S. Department of Justice investigation into elevated costs for fertilizer, machinery and other key agricultural inputs, according to reporting from Bloomberg.

Bloomberg reported the effort is aimed at gathering more on-the-ground data as regulators examine whether fertilizer producers may have coordinated to raise prices. The DOJ investigation was first reported in early March, when Bloomberg said federal officials had begun looking into whether fertilizer companies engaged in price coordination.

According to the Bloomberg report, Vaden said he has already met with officials at both the Department of Justice and the Federal Trade Commission to discuss potential lines of inquiry. He also noted that farmers could play a key role in the process.

Vaden said farmers “have a lot of information that might be relevant to these investigations.”

Bloomberg previously reported in early March that the Department of Justice is investigating whether fertilizer producers colluded to increase prices.

Speaking at the North American Agricultural Journalists’ annual conference in Washington on Monday, Vaden encouraged farmer participation in the probe, emphasizing confidentiality protections.

“We need farmers to help provide us with that information on a confidential basis, so that that can help inform the investigations that are ongoing,” Vaden said, according to Bloomberg. “I think we will have a mechanism in order to help encourage that exchange of information.”

NCGA Surveys Show Not All Farmers Have Fertilizer Secured for 2026

Against that backdrop, along with fertilizer prices climbing even higher in the six weeks after the conflict started with Iran, new surveys results from NCGA highlight how those market pressures are translating to on-farm realities.

Krista Swanson, chief economist for NCGA, says the organization conducted the survey to better understand fertilizer availability from the farmer perspective. Ag Secretary Rollins has told mainstream media that 80% of farmers have fertilizer locked in for 2026, but NCGA data contradicts that figure.

“We’re hearing that number being thrown around too, which is why we really wanted to find out directly from farmers what the status is for them,” Swanson says.

NCGA Grower Survey

(National Corn Growers Association (NCGA))

A Significant Gap in Fertilizer Readiness

The surveys show that only 60% of farmers report having their nitrogen fully purchased or secured for the 2026 growing season, while 64% say the same for phosphate. That leaves a sizable portion of producers still working to lock in supplies.

“When you think about over 500,000 corn farmers in the U.S., this isn’t a small number,” Swanson says. “Our survey results indicate that over 200,000 farmers still need at least some fertilizer for this year.”

Nitrogen remains a critical input for corn production and is closely tied to yield potential. Any shortfall, whether driven by availability or cost, can directly affect productivity and profitability.

NCGA Grower Surveys

(National Corn Growers Association (NCGA))

Younger Farmers Feeling the Pressure Most

The survey also points to uneven impacts across the farm sector, with younger farmers facing greater challenges in securing fertilizer.

Swanson says younger producers reported having more nitrogen left to purchase compared to older farmers.

“You think about younger farmers that have less capital already built up in their business, maybe tighter cash flow needs because of their equity position,” she says. “This does seem to have a disproportional impact on younger farmers.”

That dynamic raises concerns about financial strain among newer operations in a high-cost environment.

Corn Acres Likely Stable, But With Reduced Inputs

Despite the challenges, most farmers are not planning to reduce corn acreage. The survey found that 80% of respondents expect to maintain their planned acres.

NCGA Grower Survey

(National Corn Growers Association (NCGA))

At the same time, fertilizer application rates may fall short. Half of the farmers surveyed say they do not expect to apply their full amount of fertilizer.

“Pairing these two together, it seems to me like we are still going to see a lot of corn acres get planted,” Swanson says. “But those corn acres will have less fertilizer than maybe what they would have otherwise had.”

That combination could limit yield potential if input reductions become widespread.

Growing Concern Shifts to 2027

While fertilizer availability remains a concern for 2026, attention is already turning to the next crop year. Fertilizer purchasing follows a rolling cycle, and planning for 2027 will begin soon.

Survey responses show that for every one farmer more concerned about fertilizer price and availability for 2026, nearly two are more concerned about 2027.

NCGA Grower Survey

(National Corn Growers Association (NCGA))

“So farmers are concerned as we look ahead to next year,” Swanson says.

The shift reflects uncertainty about how long supply disruptions and elevated prices will persist.

Supply Chain Recovery May Take Time

Even if geopolitical tensions ease, relief may not come quickly. Swanson notes that the fertilizer market is still dealing with production disruptions and supply chain backlogs.

“A short-term ceasefire has limited immediate impact on this ongoing fertilizer crisis for farmers,” she says. “Even when a permanent end to the situation is reached, we’re still looking at recovery from supply chain backlogs and halted production that could take a long time to recover from.”

Damage to key inputs such as liquid natural gas and sulfur production could take years to repair, keeping pressure on supply.

A Tightening Outlook

The NCGA survey underscores a challenging environment for corn producers. Most acres are expected to be planted this year, but not all will receive optimal fertilizer applications. At the same time, concern is building for 2027 as farmers look ahead to the next purchasing cycle.

For many producers, the issue is no longer just securing fertilizer for this season. It is navigating a period of sustained uncertainty that could shape production decisions, costs, and risk management strategies across the U.S. corn sector.

Longstanding Concerns Over Market Concentration

In September 2025, USDA and the U.S. Department of Justice signed a Memorandum of Understanding, committing both agencies to jointly examine high and volatile input costs, which included fertilizer, by scrutinizing competitive conditions in agricultural markets and enforcing antitrust laws, particularly around price setting and market concentration.

While geopolitical tensions are the latest driver of volatility, many farm groups argue the root of the problem runs deeper. Matt Perdue, president of the North Dakota Farmers Union, says ongoing federal investigations into fertilizer pricing must lead to meaningful action.

“We appreciate the administration’s investigations into input costs,” Perdue says. “But investigations don’t do anything if they’re not followed by enforcement, and they don’t do anything if we don’t learn what came out of those investigations.”

Groups like the Texas Corn Producers Association have been raising concerns about fertilizer market concentration for years. Texas farmer Dee Vaughan says the organization began studying the issue in 2020, working with the Agricultural and Food Policy Center at Texas A&M to examine pricing trends.

“We’ve been very concerned about all of our input costs, but specifically fertilizer, because it’s the one that just keeps going up almost exponentially,” Vaughan says.

He adds those studies found a shift in how fertilizer prices are determined . Historically tied closely to natural gas costs, the study found nitrogen fertilizer pricing began tracking corn prices more closely after 2010, a change Vaughan says reflects deeper structural issues.

According to Vaughan, the small number of firms controlling the market have the data and market awareness to price inputs based on farmers’ revenue potential, rather than production costs.

“They all have economists on staff,” Vaughan says. “They know exactly what our costs are, what our income is, and they’re able to extract value based on what they see as the gross income of a farmer. It’s not based on cost of production any longer.”

Supreme Court Strikes Down Use of Emergency Powers for Trump's Tariffs

Fri, 20 Feb 2026 15:32:47 GMT

In a landmark ruling with major implications for U.S. trade and agriculture, the Supreme Court has struck down President Trump’s use of emergency powers to impose sweeping tariffs. The 6-3 decision confirms that the International Emergency Economic Powers Act (IEEPA) does not give the president authority to issue broad import duties.

The Supreme Court case known as “Learning Resources Inc. v. Trump” is an end to a legal battle that started nearly a year ago. The tariffs at issue, which were originally imposed under the International Emergency Economic Powers Act (IEEPA), were first challenged in court in April 2025 when companies, including educational toy makers Learning Resources and hand2mind, sued in federal court shortly after the duties were announced. Justices Samuel Alito, Clarence Thomas and Brett Kavanaugh dissented.

In the case Learning Resources Inc. v. Trump the court ruled, “We claim no special competence in matters of economics or foreign affairs. We claim only, as we must, the limited role assigned to us by Article III of the Constitution. Fulfilling that role, we hold that IEEPA does not authorize the president to impose tariffs.”

“IEEPA gives the president significant authority over transactions involving foreign property, including the importation of goods. But in that generous delegation, one power is conspicuously missing,” said the decision. “Nothing in IEEPA’s text, nor anything in its context, enables the president to unilaterally impose tariffs. And needless to say, without statutory authority, the president’s tariffs cannot stand.”

The Court’s ruling on Friday has major implications.

Initially, grain futures weakened after the ruling. Soybeans turned lower on fears the decision takes away a key bargaining chip ahead of Trump’s April meeting with Chinese leader Xi Jinping, raising questions about whether Beijing will follow through on additional soybean purchases. The ruling, however, could be supportive in the event it prompts China to drop its tariff on U.S. soybean imports.

Stocks rallied, with major U.S. indexes extending gains after the ruling, while Treasury yields jumped and the U.S. dollar weakened against major rivals.

The decision is a blow to President Trump’s economic agenda. The president imposed what he called reciprocal tariffs on several countries in April 2025, calling trade deficits a national emergency.

What This Means for Trump’s Tariffs

Lower courts, including the U.S. Court of International Trade and the Federal Circuit, had previously struck down these tariffs as exceeding executive authority. The Supreme Court affirmed those rulings, which means tariffs imposed solely under IEEPA now lack a valid legal foundation. Importers could see injunctions halting collections, and companies that already paid duties may seek refunds, potentially putting billions of dollars of federal revenue at risk.

But not all Trump-era tariffs are affected. Duties imposed under Section 232 of the Trade Expansion Act, which are deemed as national security tariffs, as well as the ones under Section 301 of the Trade Act, which are China-related tariffs, rely on separate statutory authority and remain intact unless challenged independently.

What This Means for Farmers, Agriculture and the Future of Trade

For agriculture, the ruling adds uncertainty to future trade leverage strategies. Many farm groups have viewed tariffs as both a negotiating tool and a source of retaliation risk.

The Court’s decision reinforces separation-of-powers limits, signaling that major shifts in tariff policy must originate in Congress, not through broad interpretations of emergency statutes.

Now that Trump’s use of IEEPA to impose sweeping tariffs has been struck down as exceeding executive authority, tariffs based solely on that law are unlikely to stand without congressional approval, while those enacted under other trade statutes remain in place, for now.

The ruling narrows presidential flexibility on trade and could reshape how future administrations approach tariff policy.

President Trump Reacts By Announcing New Tariffs

Speaking later in the day on Friday, President Trump announced he would issue a new 10% “global tariff,” while also arguing the Court’s decision limited one tool but clarified others, claiming the justices had effectively strengthened presidential trade authority by narrowing the scope of IEEPA rather than tariffs themselves.

In a swift response to the high court’s decision, Trump announced Friday that he will sign an executive order imposing a new 10% “global tariff,” just hours after the Supreme Court of the United States struck down his sweeping “reciprocal” import duties in a 6-3 ruling.

The new tariffs will be invoked under Section 122 of the Trade Act of 1974 and layered on top of other levies that remain in place following the court’s decision. Speaking during a White House press briefing, Trump called the ruling “deeply disappointing” and said he was “ashamed of certain members of the court” for lacking “the courage to do what’s right for our country.”

The court’s ruling invalidated the legal foundation underpinning many of the tariffs Trump has argued are essential to strengthening the U.S. economy and rebuilding domestic manufacturing capacity. Despite the setback, Trump signaled he will pursue alternative avenues to maintain and expand tariffs without congressional approval.

“I don’t have to,” Trump said when asked why he would not work with lawmakers. “I have the right to do tariffs.”

His remarks grew increasingly pointed, including criticism of Justices he nominated who joined the majority. Trump said he believed their decision was “terrible” and “an embarrassment,” underscoring his frustration with the outcome.

Tariffs imposed under Section 122 can remain in effect for up to 150 days. Any extension beyond that period would require approval from Congress.

Reaction to Supreme Court Ruling on Tariffs

Farmers for Free Trade quickly weighed in following the Supreme Court’s decision striking down the President’s authority to impose global tariffs under IEEPA.

“Today’s Supreme Court decision is an important step toward restoring predictability and the rule of law in American trade policy,” says Brian Kuehl, executive director of Farmers for Free Trade. “Tariffs imposed under IEEPA have been devastating for American farmers, driving up costs for inputs like fertilizer, equipment, and parts while triggering retaliatory tariffs that cut off critical export markets. Farmers have been caught in the crossfire, paying more for what they need while losing access to the customers they depend on.”

Kuehl notes while the ruling removes one source of uncertainty, concerns remain that new tariffs could be imposed through other legal avenues.

“Any new approach would likely invite the same retaliation from our trading partners that has already caused so much damage to American farmers. Tariffs hurt farmers on both ends, raising what they pay and reducing where they can sell,” he says.

The priority should now be stabilizing trade relationships and expanding market access for U.S. agricultural products, Kuehl adds, urging the administration to work with Congress on comprehensive trade solutions that “open markets rather than close them.”

According to Olu Sonola, head of U.S. economics at Fitch Ratings, the Court’s ruling is a material rollback because more than 60% of the 2025 tariffs effectively vanish. The U.S. effective tariff rate drops from about 13% to around 6%, removing more than $200 billion in expected annual tariff collections.

“Call it Liberation Day 2.0 — arguably the first one with tangible upside for U.S. consumers and corporate profitability,” he says. “However, the bigger macro takeaway is not just ‘lower tariffs,’ but ‘higher tariff-regime uncertainty.’ The odds that tariffs reappear in a revised form remain meaningful. Layer on potential tariff refunds, and you introduce a messy operational and legal overhang that amplifies economic uncertainty.”

In response to the ruling, the American Soybean Association (ASA) issued the following statement from Scott Metzger, ASA President and Ohio farmer: “The case at the Supreme Court has been closely followed by soybean farmers who have seen the cost of inputs rise over the past year due to tariffs. U.S. soybean growers are reliant upon imports for critical farming tools like fertilizer, seeds, pesticides and agriculture equipment. Moving forward, certainty and dependable market access are essential for U.S. soy to remain competitive globally. Because farmers are caught in a cost-price squeeze and ag input costs remain high, we urge the President to refrain from imposing tariffs on agricultural inputs using other authorities. We look forward to working with the Trump Administration and Congress to strengthen market opportunities and support a stable farm economy for generations to come.”

The International Fresh Produce Association (IFPA) welcomes the Supreme Court’s decision clarifying the limits of IEEPA and reaffirming that broad, country-specific tariffs fall outside its intended scope.

“While targeted tariffs can be a tool for addressing inequities between trading partners, the broad application of this blunt instrument can disrupt markets, raise consumer costs, and place unnecessary strain on growers and producers across the supply chain,” IFPA said in a statement. “IFPA does not believe tariffs should be used as a default response to every trade concern facing the United States, nor should this ruling simply prompt a shift to other tariff authorities. Instead, IFPA hopes this ruling allows policymakers to move beyond broad tariff actions and continue working toward lower trade barriers that ensure affordable access to fresh produce and floral products.

“While tariffs have been one challenge for the fresh produce and floral sectors, IFPA appreciates the administration’s commitment to easing regulatory burdens and supporting American agriculture and looks forward to working with policymakers on long-term solutions — such as equitable trade agreements, regulatory reform and workforce stability — that strengthen food security and ensure affordable, accessible produce for all families.”

What Now? Exploring Alternatives to IEEPA Tariffs

While the Supreme Court’s ruling removes the legal foundation for tariffs imposed under IEEPA, it does not mean U.S. import duties are going away anytime soon. According to a recent op-ed , President Trump still has options when it comes to using tariffs as a tool. However, trade experts say while there are other options, statutory guardrails may limit some of the more rapid changes seen under IEEPA.

According to the recent analysis, the possible alternatives include:

Section 301 of the Trade Act of 1974: The basis for existing China tariffs. This gives the U.S. Trade Representative broad authority to target “unfair” foreign trade practices, allowing for unilateral action once investigations conclude.
Section 232 of the Trade Expansion Act of 1962: Used for national security tariffs on cars, steel, aluminum, and other goods. Courts have been deferential to the administration’s claims, and new tariffs under this authority could generate revenue comparable to IEEPA tariffs.
Section 122 of the Trade Act of 1974: Intended to address balance-of-payments deficits through import surcharges or quotas. While the statute has never been used for this purpose, it allows short-term tariffs of up to 15 percent, which could be reimposed in cycles without a congressional vote, though this strategy would likely face legal challenges.

As the op-ed points out, the Supreme Court ruling eliminates one controversial path for tariffs, but Washington still has multiple avenues to impose import duties, and legal challenges are almost certain to follow any new moves.

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.

Trump Signs Executive Order Quadrupling Beef Imports from Argentina to Keep Ground Beef Affordable

Fri, 06 Feb 2026 22:39:03 GMT

In a move aimed at easing pressure on U.S. beef supplies and keeping prices in check for consumers, President Donald Trump signed a proclamation on Feb. 6, 2026, temporarily quadrupling imports of lean beef trimmings from Argentina under the U.S. tariff-rate quota (TRQ).

The action comes as USDA confirmed just last week the U.S. cattle herd is now at a 75-year low . Not only are producers showing no signs of herd rebuilding, the White House says low cattle supplies can be attributed to droughts and wildfires in 2022 that impacted key U.S. cattle-producing states, including Texas, Kansas, Nebraska and South Dakota, which have constrained domestic beef production.

Compounding the supply challenges are restrictions on cattle imports from Mexico following detections of the New World screwworm have limited feedlot stocks, contributing to a record-low U.S. cattle herd.

“As President, I have a responsibility to ensure that hard-working Americans can afford to feed themselves and their families,” the proclamation states. “To increase the supply of ground beef for U.S. consumers, I am taking action to temporarily increase the quantity of in-quota imports of lean beef trimmings under the U.S. beef TRQ.”

The proclamation authorizes an 80,000 metric ton increase in in-quota lean beef trimmings imports for 2026, which will be allocated entirely to Argentina. The additional beef will be distributed in four quarterly tranches of 20,000 metric tons each, beginning Feb. 13, 2026, and continuing through the end of the year.

Record Beef Prices Drive Action

U.S. consumers have seen beef prices climb steadily in recent years, with ground beef reaching an average price of $6.69 per pound in December 2025, which was the highest level recorded since the 1980s. Despite higher prices and the availability of alternative proteins, demand for beef remains strong, prompting record beef imports of 4.64 billion pounds in 2024, a 24% increase over the previous year.

But this is not the first time President Trump has proposed measures to address rising beef costs. In October 2025, he told reporters at the White House, “We are working on beef, and I think we have a deal on beef. The price of beef is higher than we want it, and that’s going to be coming down pretty soon too. We did something,” without elaborating.

The National Cattlemen’s Beef Association (NCBA) responded at the time with a strong warning, criticizing the President’s approach. NCBA CEO Colin Woodall says. the plan risked “damaging the livelihoods of American cattlemen and women, while doing little to impact the price consumers are paying at the grocery store.”

He emphasizes concerns about trade imbalances, the risk of introducing foreign animal diseases from Argentina, and the importance of focusing on domestic solutions such as New World screwworm facilities, regulatory reforms, and disease prevention programs.

The Trump administration, however, argues the current import expansion is a necessary response to natural disasters and market disruptions that have reduced domestic beef supply. The administration will continue monitoring supply and demand, with the Secretary of Agriculture advising on any additional measures that may be necessary to ensure stable beef prices for American families.

This proclamation highlights ongoing challenges facing U.S. cattle producers, including climate-related disruptions, disease risks, and supply chain pressures, while signaling the administration’s willingness to leverage international trade to stabilize consumer costs.

Are Beef Prices Too High? Consumer Demand Signals No

Since the president’s initial comments in October, there’s been a debate about if beef prices are too high. Oklahoma State extension livestock specialist Derrell Peel agrees consumer behavior continues to support higher prices, even if there is talk about bringing beef prices down.

“I don’t think we have a demand problem or a beef price problem. Consumers are still paying,” Close says. “If consumers didn’t want to pay high prices for beef, they don’t have to. There’s places they can go. They’re still paying it.”

High prices have raised concerns about whether consumers will eventually push back, but Terrain’s Don Close says demand data continues to defy that narrative.

“Over the last two years at Terrain, we’ve spent more time trying to evaluate and study what we can about demand,” he says. “We’ve known what the supply is.”

By examining beef prices relative to income, inflation and competing proteins, Close said the results remain consistent.

“We’re looking at all-fresh beef prices against the consumer price index. We’re looking all fresh against average hourly wage. We’re now looking at beef in relationship to both pork and broilers,” he says. “And all those matrices that we’re looking at, we’re not seeing and have not yet seen any softening in beef demand. It’s still in place.”

Economists Weigh In: Can Beef Prices Be Lowered Without Harming Producers?

In October, Trump’s initial comments tanked the cattle market. To better understand whether retail beef prices can be reduced without affecting cattle markets, Farm Journal spoke with two economists and livestock market experts. When asked if there’s a way to lower beef prices without impacting cattle futures, both economists say the short answer is, “no.”

“Simple answer is no,” says Close. “I would add to that that when we look at beef prices in relationship to the other proteins, I would absolutely say that pork and broilers have been a beneficiary of the record high beef prices. No doubt. But they are not yet to a point that they are a detriment to beef prices; beef is still gaining market share relative to other proteins.”

David Anderson, extension livestock economist at Texas A&M, echoed that perspective. “I think it’s a great, interesting question, but from the ranch to wholesale beef to retail beef, these prices are all related,” Anderson says. “If it was possible to do something that actually brought down retail prices to consumers, it’s going to have an effect upstream, downstream, however you want to call that. But even then, I’m not sure there’s much you can do to bring down retail prices. We’ve got a product that’s in demand. Even though we look at our nominal retail beef prices that are record high, I think that for consumers, beef delivers value for the money and they’re going to keep buying. That and tighter supplies is a recipe for higher prices. People continue to buy. There’s a bunch of big trends there, heck, let’s eat more protein, you know, and that helps the whole meat complex: beef, dairy, eggs, beans, you name it. So while this supports cattle prices, it also means there’s not a whole lot you can do to bring down beef prices significantly.”

New U.S.-Argentina Trade Deal Sets Stage For President Trump’s Latest Proclamation

The move this week follows a new trade and investment agreement between the United States and Argentina, signed earlier this week by USTR Jamieson Greer and Argentina’s Foreign Minister Pablo Quirno. The agreement provides preferential market access for U.S. goods, eliminates or reduces tariffs on a wide range of products, and enhances cooperation on economic and national security issues.

On agriculture, Argentina has agreed to open its market to U.S. poultry and poultry products within a year and simplify export regulations for U.S. beef and pork. The agreement also requires Argentina to accept U.S. food safety and regulatory standards for meat and poultry, while prohibiting restrictions on U.S. use of certain cheese names, such as asiago, feta, or camembert.

USTR officials said the deal will also enhance cooperation on export controls for sensitive items, protect telecommunications infrastructure, and prevent digital trade barriers that could affect U.S. tech companies. Although China is not mentioned in the text, the agreement is designed to strengthen U.S.-Argentina coordination in addressing unfair trade practices from third countries.

What’s Ahead?

The Trump administration will continue monitoring domestic beef supply and demand, with the Secretary of Agriculture advising on any additional measures necessary to maintain affordable prices for American consumers. While some in the cattle industry remain cautious about importing Argentinian beef, the administration frames the decision as a short-term solution to natural disasters and market disruptions that have tightened domestic beef availability.

UPDATE: Supreme Court Did Not Issue Ruling on Tariffs Case, Decision Still Pending

Wed, 14 Jan 2026 13:45:23 GMT

UPDATE: The U.S. Supreme Court chose not to release its ruling on President Trump’s global tariffs Wednesday. A decision is still pending.

The U.S. Supreme Court is expected to issue one or more rulings on Wednesday in cases already argued before the justices as major legal disputes remain pending, including litigation testing the legality of President Donald Trump’s global tariffs.

The court is set to release rulings at about 10 a.m. ET (1500 GMT). The court does not announce ahead of time which rulings it intends to issue. The court issued one ruling last Friday but did not act in the tariffs case, which was argued on Nov. 5.

The challenge to Trump’s tariffs marks a major test of presidential powers as well as of the court’s willingness to check some of the Republican president’s far-reaching assertions of authority since he returned to office in January 2025. The outcome will impact the global economy.

During arguments in the case, conservative and liberal justices appeared to cast doubt on the legality of the tariffs, which Trump imposed by invoking a 1977 law meant for use during national emergencies. Trump’s administration is appealing rulings by lower courts that he overstepped his authority.

Trump invoked the International Emergency Economic Powers Act to impose so-called “reciprocal” tariffs on goods imported from individual countries — nearly every foreign trading partner — to address what he called a national emergency related to U.S. trade deficits. He invoked the same law to impose tariffs on China, Canada and Mexico, citing the trafficking of the often-abused painkiller fentanyl and illicit drugs into the U.S. as a national emergency.

The challenges to the tariffs in the cases before the Supreme Court were brought by businesses affected by the tariffs and 12 U.S. states, most of them Democratic-governed.

Other cases awaiting rulings include disputes concerning voting rights, religious rights, Trump’s firing of a Federal Trade Commission member, LGBT “conversion therapy” and campaign finance limits, among others.

(Reporting by Andrew Chung; Editing by Will Dunham)

China Slaps Tariffs on EU Dairy: Trade War Escalates, Reshaping Global Market

Mon, 22 Dec 2025 18:08:42 GMT

The latest developments in international trade have EU dairy producers treading in turbulent waters. The dynamics between China and the European Union (EU) have taken yet another retaliatory turn, triggering concerns for various industries, particularly the dairy market. This follows a series of retaliatory actions from Beijing in response to the European Union’s tariffs on Chinese electric vehicles (EVs) — a saga that has been unfolding since the EU’s anti-subsidy investigation into Chinese EVs in 2023.

The Trade Spat Heats Up
Imagine a chessboard, with China and the EU as the main players. The EU’s initial move was imposing tariffs on Chinese electric cars, but Beijing swiftly countered with tariffs on EU imports, starting with brandy and pork and now setting its eyes on dairy products. This tit-for-tat scenario is a classic example of a trade war where products, unfortunately, become pawns in larger political games.

The Impact on Dairy
China’s newly imposed tariffs make EU dairy products, such as cheese, substantially more costly for Chinese consumers. Consequently, these tariffs pose significant challenges for EU dairy exporters, with French cheese producers being particularly vulnerable to these economic changes. The shift could potentially divert Chinese buyers toward other dairy-exporting countries, such as New Zealand, due to the newfound competitive edge of their products.

Meanwhile, Chinese dairy companies, who are already faced with an overabundance of milk and reduced prices domestically, might find a silver lining. By making imported EU dairy less appealing due to heightened prices, these companies might experience relief from excessive competition.

Negotiations Continue
As China and the EU continue negotiations over the EV tariffs, core disagreements persist. Currently, the dairy tariffs are provisional, leaving room for possible adjustments based on the final decision expected around mid-February 2026.

According to Shawna Morris, executive vice president of trade policy and global affairs at the National Milk Producers Federation, if these tariffs on European cheeses stick, it could improve how competitive U.S. cheese exports are in China.

“The duties on EU products are simply provisional, though; they may be revised at the close of the investigation in mid-February 2026,” Morris says. “The biggest challenge for U.S. cheese exporters to China though remains the duty-free access enjoyed by New Zealand product due to its FTA with China.”

Matt Herrick, executive vice president and chief impact officer with the International Dairy Foods Association (IDFA), says the direct overlap between U.S. and EU dairy products shipped to China isn’t extensive. However, he emphasizes: “If there is a market opportunity created due to this action or any other bilateral actions taken by trading partners with our competitors, U.S. dairy exporters are ready and able to step into that space and be a reliable supplier of high-quality, competitively priced dairy.”

Herrick also highlights the critical need for U.S. dairy exporters to diversify their markets beyond China. Historically, China has been the third-largest export market for U.S. dairy, after Mexico and Canada, consistently accounting for 7% to 10% of annual U.S. dairy exports by value. However, China’s increasing drive for self-sufficiency means demand for imported dairy is expected to slacken, creating a direct competitive challenge for U.S. products.

To address this, the U.S. dairy industry is actively working to develop multiple new markets. Herrick points to collaborative efforts with the Trump administration that led to new framework deals and expresses enthusiasm for working with the USTR and the White House to explore opportunities in Southeast Asia, the Middle East, North Africa, Central America and South America. This strategic diversification aims to reduce the industry’s reliance on any single top market.

These points align with arguments effectively presented in this op-ed piece by Gregg Doud, president of the National Milk Producers Federation (NMPF), and Michael Dykes, CEO of IDFA.

Phil Plourd, president of Ever.Ag Insights, says at a high level, this all will make cheese from Europe more expensive in China.

“That’s not a bad thing from a U.S. perspective,” he says. “At the same time, I’m not convinced that the volumes in play would necessarily move the needle in a big way.”

In these uncertain and volatile times, the global dairy trade landscape is witnessing a realignment following the international maneuvers of economic chess. As the world awaits the outcome of ongoing negotiations, stakeholders from various sectors remain watchful, ready to adapt to the ever-shifting trade currents. For the EU dairy industry, the upcoming months will be pivotal in determining the consequences of these trade tensions and their broader impacts on global markets.

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Grim Reality: Global “Wall of Milk” Weighs on Dairy Markets as Production Surges

Wed, 03 Dec 2025 19:12:59 GMT

A “wall of milk” is building across global dairy markets, and the surge in production is already showing up in price signals for U.S. farmers, says Lucas Fuess, senior dairy analyst for RaboResearch Food & Agribusiness, based in Chicago.

“It is exceptionally rare to see the growth numbers that we are experiencing right now,” Fuess says, pointing to months of near 4% year-over-year U.S. milk production growth and expectations for above-average strength into 2026. “U.S. farmers are doing everything possible to maximize that output right now, but we’re tipping the scales a little bit into an oversupplied situation, and that weighs on prices.”

We’ve Tipped the Scale Into An Oversupply Situation Now

That unprecedented growth has led to a serious pressure on prices. Fuess says the price board makes the argument plain.

“If you look at a year ago, milk prices are $22 to $23, and right now the Class IV futures curve is in the $13 range,” he says. “That is well below cost of production. It is a clear market signal that we have enough milk right now in the U.S.”

How did we get here? He says last year’s profitability helped set the stage for the current supply burden.

“A year ago, profitability is really good for farmers,” Fuess says. “There is a market signal that says, ‘Make more milk. We need this product, and you’re profitable.’”

But the normal dairy lag is catching up, and dairy producers saw the signals last year to produce more milk.

“We can’t just shut off the cows overnight,” he says. “Now that we have these cows in milk, we deal with the supply through the next several months until we can readjust the overall situation.”

It’s Not Just The U.S.

Fuess says the bigger problem is the same output response is happening across the world’s key exporting regions — tightening the competitive squeeze.

“It’s not just the U.S. It’s essentially any of our key exporting areas around the world right now,” he says. “If you look at the European Union, there is massive milk production growth. Into South America, some countries are close to 10% growth versus the prior year. Even New Zealand could have a record milk production season.”

The “wall of milk” production entering the system is monumental, and it’s not just in the U.S., but around the globe.

(Rabobank)

“When you consider this all in sum, there is really no part of the world that is slowing down on milk right now, and that exacerbates the situation,” he adds.

The growth in the EU has been even bigger than what most were forecasting. Analysts say the expectation was production in Europe would grow, but not this much.

What’s behind the global growth? It’s a similar incentive structure: strong prices.

“It is very much milk-price driven,” Fuess says. “When the market signals that, farmers respond with additional milk supply.”

Cow Numbers Hit 30-Year Highs

It’s not just that producers are seeing more milk per cow. Fuess says another layer to the supply story is the expansion in the U.S. milking herd — bigger-than-normal swings.

“Historically, there is probably around a 150,000-cow swing that we are used to between highs and lows,” he says. “But between summer of 2024 and into fall of this year, cow numbers grow by more than 200,000 head. That is massive compared to what we are typically used to.”

He says the herd is now the largest since the 1990s, which is roughly 30-year highs. And the growth in cow numbers can also be attributed to profitability last year, plus beef-on-dairy economics that are incentivizing that growth.

“It reflects profits coming from that milk check, but also the beef-on-dairy trend,” Fuess says. “Farmers want to keep those adult cows in milk to capitalize on the value and revenue they get from cows right now.”

Tale of Two Demand Stories

Fuess says demand depends on where the product is headed.

“If you look at domestic U.S. demand — product we consume in country — we are maybe a little bit oversupplied right now,” he says. “That’s where we get some of these weaker price signals.”

He points to the product categories feeling the pressure.

“Products like cheese or butter are at multi-year lows on their prices,” Fuess says.

Still, he sees a major outlet continuing to do heavy lifting: exports.

“The good news is we could see a record export year for dairy products leaving the U.S. in 2025,” he says, following what he calls a “really good” 2024. “It’s another testament to how powerful exports are in removing excess product and capitalizing on growing global demand for dairy.”

Dairy Remains Largely Untouched By Tariffs

Even with trade tension in the news, Fuess says dairy exports have seen limited disruption, especially with the U.S.’s two biggest North American buyers.

“With all of the trade and tariff discussions, dairy has very minimal impact,” Fuess says. “Part of that is the USMCA agreement that allows products to continue to flow openly into Mexico and with some restrictions into Canada.”

He says there is a brief hiccup earlier this year for whey shipments tied to the U.S.-China tariff escalation, but he describes it as temporary.

“Overall, it is a very strong and solid year for our exports,” Fuess says. “That’s really good to talk about regardless of the back-and-forth in the headlines.”

Pressure Expected to Continue Into Early 2026, But Is a Mid-Year Recovery Possible?

Fuess says the start of 2026 could remain difficult as demand seasonally cools and milk production builds toward spring flush.

“Into the first quarter of 2026, demand is falling a little bit after the holidays,” he says. “At the same time, milk production is growing toward seasonal highs — toward that spring flush. I’m not optimistic for milk price growth in the near-term months of 2026.”

But he expects some tightening later in the year as producers respond to economics.

“Into the middle of next year, I do think herd size starts declining as farmers take a look at how many cows they need,” Fuess says. “We expect a little bit of upside moving throughout the year. Milk prices are certainly not good right now, but I think it is short-lived before we see some recovery into 2026.”

U.S. Drops 40% Tariff on Brazilian Beef in New White House Executive Order

Fri, 21 Nov 2025 01:31:42 GMT

A White House Executive Order issued Thursday modifies the scope of earlier tariffs placed on products from Brazil, effectively removing the additional 40% duty applied to Brazilian beef. The change reverses part of a July trade action that had imposed elevated import duties on multiple categories of Brazilian goods. It’s the latest effort by the Trump administration to bring food prices down for Americans.

Brazil is the world’s largest beef exporter, and its product plays a key role in filling U.S. demand, especially in processing beef and manufacturing trim. The tariff increase earlier this year had raised costs for processors and food manufacturers, tightening supply availability and contributing to price pressure.

This latest move follows an Executive Order signed on Friday that modified the scope of the reciprocal tariffs he first announced on April 2, 2025. The Friday EO exempted several agricultural products from tariffs , including fruit, coffee and fertilizer.

What Thursday’s Executive Order Does

According to the new order, certain agricultural imports from Brazil are now exempt from the extra ad valorem tariff that had been layered on top of existing duties. Beef is among the commodities specifically impacted — meaning importers will no longer pay the higher tariff rate that had been in effect since mid-summer.

A complete list of the products that will no longer face the 40% tariff was posted online. That list includes the following beef products:

Fresh or chilled beef
Frozen beef
Edible bovine offal, fresh or chilled
Edible bovine offal, frozen
Salted, dried, smoked or brined beef

Read More: What Does Talk of $10 Ground Beef Mean to Producers?

Why the White House Lifted the Tariff

In the Executive Order, President Donald Trump specifically referenced the call he had with Brazilian President Luiz Inácio Lula da Silva on Oct. 6, which he said addressed concerns in the previous Executive Order that added the additional tariffs.

“These negotiations are ongoing. I also have received additional information and recommendations from various officials who, pursuant to my direction, have been monitoring the circumstances involving the emergency declared in Executive Order 14323,” said Trump in the Executive Order. “For example, in their opinion, certain agricultural imports from Brazil should no longer be subject to the additional ad valorem rate of duty imposed under Executive Order 14323 because, among other relevant considerations, there has been initial progress in negotiations with the Government of Brazil.”

The Executive Order went on to say: “after considering the information and recommendations these officials have provided to me and the status of negotiations with the Government of Brazil, among other things, I have determined that it is necessary and appropriate to modify the scope of products subject to the additional ad valorem rate of duty imposed under Executive Order 14323. Specifically, I have determined that certain agricultural products shall not be subject to the additional ad valorem rate of duty imposed under Executive Order 14323.”

Accordingly, an updated version of Annex I to Executive Order 14323 is attached to this order, which shall be effective with respect to goods entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern standard time on Nov. 13, 2025. In my judgment, these modifications are necessary and appropriate to deal with the national emergency declared in Executive Order 14323.

Background on Tariffs on Brazilian Beef

The Trump administration issued an executive order on July 30, 2025, instituting an additional ad valorem duty of 40 % on many products of Brazilian origin. That 40% duty was in addition to an existing 10% tariff under a separate “reciprocal tariff” measure —bringing the total effective tariff to about 50% on most affected Brazilian goods.

Fear of Trump Dumping Tariffs Caused Selloff in Cattle Earlier This Week

Even the fear of Trump removing the steep tariff on Brazilin beef caused cattle prices to tank earlier this week.

Brad Kooima with Kooima Kooima Varilek told Michelle Rook on Monday that concerns of the tariff being lowered was part of the selloff in the cattle futures last week and why the market started off lower Monday.

Kooima said futures stabilized after it was confirmed the 50% tariff on Brazil beef was only lowered 10%.

Looking ahead, Rook reports the other major issue hanging over the cattle market is when the Trump administration will reopen the Mexican border to live cattle import. Some reports say the Trump administration is pushing for that to happen in January.

Read More: Did the Administration’s Plan to Lower Beef Prices Wreck the Bull Run in the Cattle Market?

Setting the Record Straight: What China Actually Agreed to Buy—And When Those Ag Purchases Will Happen

Mon, 03 Nov 2025 23:05:29 GMT

The White House announced a sweeping new U.S.–China trade agreement late last week that includes substantial commitments from Beijing to purchase U.S. agricultural products — marking what officials call a “breakthrough” in restoring and expanding trade flows between the two countries.

According to the White House fact sheet , China will buy 12 million metric tons of U.S. soybeans by the end of 2025 and 25 million metric tons annually through 2028. The deal also restores trade in sorghum, hardwood logs, and a range of other commodities while lifting retaliatory tariffs on U.S. beef, pork, dairy, wheat, corn, cotton, and other farm products.

Yet, with mixed messages from the White House and U.S. Treasury Secretary Scott Bessent, there was some confusion on whether China would purchase an additional 12 million metric tons of soybeans, of if it was 12 million total.

As AgMarket.Net’s Jim McCormick pointed out, the U.S. already sold China 5.9 million metric tons earlier this year, before the trade war broke out. Comments from Bessent made it sound like China would be 12 million metric ton total, which would have equated to only buy an additional 6.1 million metric tons yet this year.

However, the White House Fact Sheet released over the weekend cleared the air, saying, “China will purchase at least 12 million metric tons (MMT) of U.S. soybeans during the last two months of 2025 and also purchase at least 25 MMT of U.S. soybeans in each of 2026, 2027, and 2028. Additionally, China will resume purchases of U.S. sorghum and hardwood logs.”

What This Means for U.S. Farmers

For U.S. row-crop producers and livestock farmers alike, the agreement could spell renewed demand from one of the world’s largest agricultural importers. The 25 MMT annual soybean commitment alone represents a major market opportunity for U.S. producers, especially in key states such as Iowa, Illinois and Minnesota — and for U.S. sorghum growers in the High Plains. The lifting of tariffs on beef, pork and dairy also opens additional channels for livestock- and dairy-product exporters.

At Kansas State University, Dr. Allen Featherstone, head of the Department of Agricultural Economics, calls the deal an encouraging sign for U.S. farmers — especially after years of market turbulence.

“It certainly is a bright spot and big news,” Featherstone says. “Traditionally, China has been buying between 25 and 34 million metric tons. So certainly, the 25 million for the next three years will put that in the range of what historically has been done. The 12 million between now and January certainly is a heavy lift but also a big buy.”

Timing And The Broader Picture

According to the White House, the buys start immediately: 12 MMT in the last two months of 2025 and then on into each of the next three years. The scope of the deal also signals more than agriculture: China has agreed to suspend retaliatory tariffs on U.S. goods announced since March 4, 2025 and to remove its “unreliable entity” and end-user listing measures.

Featherstone says that timing matters, since late fall and early winter are when China typically turns to U.S. soybeans before switching to Brazil in February and March.

“Based on current prices, it’s about a $4.5 billion deal between now and January,” he explains. “If you look at where we are the next three years, it’s about a $10 billion deal — and that’s good news.”

He points out that soybeans remain the No. 1 U.S. export to China, making the commodity a central part of trade negotiations.

“For the last three years, soybeans are the number one import in China from the U.S.,” Featherstone says. “As they’re trying to get leverage over the U.S., the soybean market is one of the places where they can have leverage.”

The Next Hurdle? Tracking the Purchases Amid a Government Shutdown

While the commitments are substantial, Featherstone cautions that verifying China’s purchases will be more difficult due to the ongoing U.S. government shutdown, which has delayed USDA export reporting.

“Tracking will be important,” he says. “Last week they purchased three vessels — about 180,000 metric tons. There are sources besides the government, but certainly not having the government data is a problem.”

Without weekly USDA export reports, private-sector analysts are relying on commercial shipping data and trade wire confirmations to track shipments. Economists warn that these unofficial estimates often vary widely, adding uncertainty to market reactions.

Opportunities and Caveats

Agribusiness groups, U.S. exporters and farm economists will be tracking how the commitments translate into actual purchases and shipping logistics. The upside is clear: large volume commitments from China boost U.S. export potential, may help stabilize or raise soybean, sorghum and other commodity prices, and can provide relief to ag sectors hard-hit by prior trade disruptions.

But there are caution flags too. Commitments do not always guarantee immediate shipments. Market conditions, logistics, currency movements, and China’s domestic production may influence actual demand and timing.

Exporters will want to monitor how quickly China follows through, whether the buys are genuinely incremental (vs. simply re-directing existing purchases) and how U.S. logistics chain handles increased volumes.

How This Will Impact Farmers and Ranchers in the Months Ahead

According to the White House fact sheet, here’s how the trade and economic deal, reached between President Donald J. Trump and President Xi Jinping of China, China committed to buying large amounts of soybeans, but China also said it would start purchasing sorghum again. On the livestock front, tariffs were suspended on beef, pork, dairy and more.

So, what should farmers and ranchers watch in the months ahead?

Soybeans: Given the huge volume — 12 MMT in 2025, then 25 MMT annually — soybean exporters will want to watch new crop availability, global competition (e.g., Brazil, Argentina) and U.S. export origination points.
Sorghum & hardwood logs: These categories were specifically called out for resumption of trade, suggesting new or renewed market access in China.
Livestock, dairy & other ag products: With tariffs suspended on beef, pork, dairy, and aquatic products, U.S. meat and dairy exporters may gain longer-term access to Chinese markets.
Tariff & non-tariff measures: The removal of retaliatory tariffs and other counters means fewer barriers for U.S. ag exports, but exporters should still watch for regulatory or sanitary measures that often influence trade.
Supply chain & logistics readiness: Meeting large volume commitments will test U.S. export capacity, shipping, port access and coordination between exporters and farmers.

Looking Ahead

The China-U.S. deal marks a potentially significant turning point for U.S. agricultural exports in 2025: large-scale Chinese commitments, tariff relief, and expanded access could open new markets and relieve pressure in certain ag sectors.

But the real story will be how fast, how reliably, and how fully China follows through with purchases — and how U.S. producers, exporters, and logistics systems respond.

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.

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 .

President Trump Threatens New Round of Tariffs Over the Weekend: Here’s the Latest

Tue, 15 Jul 2025 13:39:35 GMT

U.S. commodity markets were down to start the week in Sunday night trade as the markets digested the latest tariff announcement by President Donald Trump. On Saturday, President Trump threatened to impose 30% tariffs on Mexico and the European Union starting on August 1. The announcement came after a string of new tariff threats last week, as the Trump administration’s deadline for trade deals came due.

On Monday, President Trump continued with tariff talk, saying he would implement “severe tariffs” on Russia unless a peace deal is reached with Ukraine within 50 days.

He provided few details on how they would be implemented but described them as 100% secondary tariffs, meaning they would target Russia’s trading partners in an effort to isolate Moscow in the global economy.

The latest tariff threats weren’t good news for farmers looking to price fertilizer for fall, as StoneX Group says Russia is the United States’ top destination for both urea and UAN imports. StoneX points out Russia’s market chair has “grown substantially in recent years.”

Monday’s news follows a week where many anticipated trade deals. Instead, President Trump made a series of announcements with new tariffs. The new tariffs on Mexico and the European Union, which Trump announced Saturday, capped off a week of sweeping tariff threats.

Earlier in the week, Trump warned of a possible:

50% tariff on all copper imports
50% tariff on all goods from Brazil
35% tariff on Canadian goods
25% tariff on goods from Japan
25% tariff on imports from South Korea
200% tariff on imported pharmaceuticals

The positive side of the announcements is the Trump administration says any products covered under the U.S. Mexico Canada Agreement (UMCA) won’t face the new tariffs.

President Trump also sent letters to both Japan and South Korea last week, saying their goods will be taxed at 25% starting August 1st.

The President posted the two letters he sent to those countries’ leaders on his Truth Social site. In the letter to South Korea, he stated when it comes to Korea’s tariff and non-tariff polices and trade barriers, the relationship between the two countries has been far from reciprocal. He added the 25% tariff was far less than what he says is needed to eliminate a trade deficit disparity.

The letter to Japan added if Japanese companies decide to build or manufacture a product within the U.S., there will be no tariffs. Japanese and U.S. negotiators have been working for several weeks to try and reach a deal.

Lack of Progress Impacts Commodity Prices
The lack of trade announcements last week was just one factor that caused corn prices to tank, according to AgMarket.net’s Matt Bennett. While rain in the upper Corn Belt was also bearish for the markets, little to no movement on trade is also pressuring prices.

“We had no trade announcements, and then we continued to talk about tariffs. The unfortunate reality right now is it appears the administration is playing the long game, trying to get people to come to the table with better trade deals than what we currently have seen. But it certainly isn’t doing any favors for the corn market,” Bennett said on U.S. Farm Report this weekend. “I think something like a big trade agreement certainly could tilt the tide more in the favor of the corn market moving higher. Until you get that, with weather being as good as what it is, there’s nothing there.”

It’s not all bearish, though. Arlan Suderman of StoneX Group says the 50% tariff on Brazil is actually bullish for beef.

“We already have a shortage of protein in America with the cattle herd being shrinking over recent years because of lingering drought in the western half of the country, and supplies are tight. We’re just getting to the point of trying to rebuild those supplies, which holding back heifers, tightens up the supply of meat even more. We’re feeding to record-high carcass weights to try to fill the void. We’re increasing imports to record levels. Brazil is the primary supplier of those imports: 27% of our imports come from Brazil in the first five months of the year, according to the latest data we have available, that’s 666 million pounds. That’s 4% of consumption,” Suderman says.

If you think 4% doesn’t sound like a big deal, Suderman says it is - especially considering meat demand in the U.S. has turned out to be inelastic.

“We’ve been shifting from a starch-based diet more heavily toward protein-based. And as the prices go up, we’re actually increasing demand for beef and the other proteins - but we don’t have the supply of it. I think that could be a real problem going forward for the meat industry and the meat supply. We will have to find somewhere else to get that meat,” Suderman says.

Are Trade Deals Close?

While President Trump initially stated he had reached trade agreements with 200 countries, only a few have been officially announced. These include deals with China, the United Kingdom, and Vietnam, however. Negotiations with other countries are ongoing, with the administration extending the deadline for tariff-related negotiations to August 1.

The European Union says it was working on sealing a trade deal with the U.S. by the end of this month, and the European Commission president says the EU was working closely with the Trump administration to reach a deal.

Trade Dominance or Trade Domino? Trump Announces Trade Deal with Vietnam

Wed, 02 Jul 2025 19:22:28 GMT

Less than a week before the Trump administration’s 90-day pause on many reciprocal tariffs with several countries is set to expire, President Donald Trump announced a trade deal with Vietnam on Wednesday. The deal, according to Trump, allows the U.S. “total access” to Vietnam’s markets with a zero tariff on U.S. products exported to Vietnam.

A deal with Vietnam could benefit U.S. commodities that face higher tariffs, including fruits, nuts, pork and beef exports.

The president made the announcement on his Truth Social site, saying Vietnam will pay the U.S. a 20% tariff on any goods sent into the U.S. and a 40% tariff on any goods that originate in another country and then are transferred to Vietnam before coming to the U.S.

🚨 pic.twitter.com/i35oMvbEvW
— Rapid Response 47 (@RapidResponse47) July 2, 2025

When trade talks started with Vietnam last month, Vietnamese officials had pledged to boost purchases of American goods, including farm products and energy. However, no specific trade volumes were announced with the trade deal.

What’s the potential for agriculture? Dan Basse, founder and president of AgResource Company, says this could help gain greater access for fruits, nuts and horticulture products, which have tariffs ranging from 15% to 20%, versus corn, soybeans and soybean meal.

“In the case of corn and soybeans and meal and wheat, we’re talking about tariffs today that are 1% to 2%, that’ll go to zero, so it’s something, don’t get me wrong, it’s 5¢ or 10¢ in a bushel of corn, maybe 7¢ to 12¢ on beans, but it is not the panacea that’s going to get a lot of Vietnamese demand going forward,” Basse says.

The trade deal came as a bit of a surprise on Wednesday. Earlier this week, Treasury Secretary Scott Bessent said earlier this week that while the focus of the administration is getting the One Big Beautiful Bill across the finish line this week, that focus shifts back to trade next week. Bessent warned countries could be notified of sharply higher tariffs as a deadline approaches.

Is this trade deal the start of a domino of trade deals that could fall ahead of next week’s deadline? It’s possible, but Stand Grain’s Joe Vaclavik says many more are needed to shift the sentiment in the commodity market to a bullish tone.

“Get a trade deal with China that mirrors Phase One, that includes large purchase agreements, then it’s a game changer,” Vaclavik says. “But anything less than that, as of right now, I don’t think is going be a market mover or a game changer from a supply and demand standpoint.”

Vaclavik agrees with Basse, in that Vietnam alone isn’t a huge demand story for corn and soybeans.

“I think you’re going to see a lot of these announcements like with Vietnam where it sounds great, but Vietnam consumed 16 million metric tons of corn last year. That’s not enough to really put them on the map as something that’s going to move the market. You need a China, a country who consumes 300 million metric tons of corn per year to come in and agree to agree and also agree to buy. And that’s how you move the needle.”

Push for More Protein?

Protein exports are also an area of opportunity. U.S. dairy exports have shown strong growth into Vietnam, with increases in nonfat dry milk powder, whey, and lactose.

As for meat exports, figures from the U.S. Meat Export Federation (USMEF) show shipments to Vietnam in 2024 included:

5,052 metric tons of beef and beef variety meat valued at $43 million
and 4,662 metric tons of pork and variety meat with a value of $10 million.

The U.S. current ranks fifth in top exporters to Vietnam, but it’s key to note the U.S. is the largest trading partner with Vietnam that does not have a Free Trade Agreement (FTA). With talks of tariff reductions, it could hep make U.S. pork more competitively priced compared to big competitors like Brazil, the European Union and Canada. Those countries currently have duty-free access to Vietnam.

The current tariff rates vary by product, including:

Chilled beef carcass/ ½ carcass: 30%
Chilled beef bone-in: 20%
Chilled beef boneless: 14%,
Frozen beef bone-in/frozen carcass 20%
Frozen boneless beef: 14%
Chilled pork: 22%
Frozen pork: 10%
Offal: 8%.

Fact sheet on meat exports to Vietnam

(USMEF )

Vietnam’s Growing Population

Farm Journal’s Michelle Rook visited Vietnam earlier this year and saw firsthand the potential growth. Vietnam has a 100 million people and a growing middle class looking to add protein to their diet. With limited soybean crushing capacity, the country currently depends on soybean meal imports for their livestock and aquaculture feed needs.

She reports the country’s soy processing industry is small with only four plants, which import 2 million tons of soybeans annually, including from the U.S. According to Rook’s reporting, that could be an area where soybean exports could grow, fueling Vietnam’s growing aquaculture and livestock production.

You can read and watch Rook’s in-depth reporting here .

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.

Your Next Read:
A Surge in U.S. Milk Production: Insights to What States Stood Out

Navigating the Global Dairy Industry: A Resilient Journey Through Uncertainty

Mon, 23 Jun 2025 17:25:24 GMT

In the ever-evolving dairy industry, navigating through challenges and opportunities requires keen insight and strategic foresight. Amid global chaos, factors like bluetongue, avian influenza, H5N1 and foot-and-mouth disease, the dairy sector continues to demonstrate resilience.

Mary Ledman, dairy global sector strategist for Rabobank, recently shared a perspective on the current state of the global dairy market. As she collaborated with Rabobank’s team of six analysts from around the world to compile their second-quarter dairy report, they found themselves pondering the question, “Is this too good to be true?” Ledman says three clear messages stand out from the report.

1. Steady Supply in Turbulent Times

Despite an array of factors impacting milk production, cows continue their steady output.

“It’s not huge growth, but nevertheless, we’re moving forward,” Ledman says. The report showcased that 2025 will mark the first year of milk production growth for the U.S. since 2021.

Supply growth has been muted and manageable, yet the outlook is positive, with projections for more substantial gains in milk production.

“Although in the second half of this year and into 2026, we see more positive gains in milk production,” Ledman says.

2. Evolving Consumer Demand

Retail dairy prices saw deflation around the globe in nearly all regions during parts of 2024. However, higher milk and dairy product prices in the second half of 2024 have continued into 2025, which has translated into higher prices for the consumer at the retail and food service outlets. In the U.S., restaurant traffic declined for the eighth consecutive quarter, with a 7% year-over-year drop in the first quarter of 2025.

While consumers around the world face tightening budgets, the demand for dairy persists. However, consumption patterns are shifting. Whereas pizza delivery might be declining, there’s an increasing tendency to dine at home, where milk serves as a staple on the table. Such resilience speaks volumes about dairy’s enduring appeal.

3. Dynamics of Global Dairy Trade

The global dairy trade is not without its disruptions, particularly with the uncertain on-and-off tariffs. Some dairy exporters, including those dealing in butter and cheese, have strategically front-loaded their products into markets like the U.S. in anticipation of increased tariffs. Similarly, China, a significant market for whey ingredients, saw a surge in imports during the first quarter. Nevertheless, by April trade figures had dropped dramatically.

The U.S.-China tariff escalation was paused May 12, with China’s retaliatory tariff dropping from 125% to 10%. The cool-off period is for 90 days. Despite these fluctuations, there’s an optimism for a rebound in trade volumes as new opportunities emerge.

Balanced Perspective Amid Chaos

Despite global chaos, the dairy industry has managed a good supply-demand balance.

“As things calm down in the second half of the year, we could see improved consumer optimism, potentially bringing more traffic to eating establishments and boosting dairy sales,” Ledman says

The expansion within the U.S. cheese industry, which is part of an $8 billion-plus investment in processing, focuses on strategic and rational expansion plans, underscores a robust market driven by genuine demand. Ledman says that with investments in facilities to cater to this demand, the environment for U.S. dairy appears promising.

This expansion also highlights the increasing role of privately held companies in meeting product demands — a shift from cooperative-lead expansions prevalent in the past.

With targeted strategies, the U.S. now stands as a front-runner in exporting competitively priced butter and cheese, leveraging price advantages on the global stage.

While China might not hold the same allure for certain dairy imports, its modernization and enhanced dairy self-sufficiency mark a significant shift in global trade strategies. China’s dairy herd totaled 1.49 million head in 2024, a year-over-year increase of 6%.

Despite gains from large-scale farms, the exit of small-to-medium-sized farms is expected to outweigh these increases. As a result, Ledman says that the projection of total milk production in 2025 is likely to decline by 2.8%. As a major buyer of whey products, maintaining good trade relations with China remains crucial.

The interplay between dairy and beef industries showcases innovative alignment with consumer trends and the driving forces of economics. With the dairy sector adapting to meet evolving demands while extending herd lactations, the narrative of growth and sustainability continues.

In a world filled with unpredictability, the global dairy industry’s resilience, adaptability, and strategic foresight suggest a promising path forward for the U.S. dairy industry, laced with opportunities and growth on the horizon.

Your Next Read: A Surge in U.S. Milk Production: Insights to What States Stood Out

Pigs Can't Fly: U.S. High-End Livestock Breeders Lose Millions in China Tariff Fallout

Thu, 22 May 2025 13:33:21 GMT

Dr. Mike Lemmon’s pigs, each valued between $2,500 and $5,000, were supposed to be on a plane bound for Hangzhou, China, from St. Louis in April, where’d they spend the flight snoring, play fighting and snacking on oats and husked corn before taking up residence at Chinese hog farms.

Instead, many went to a local Indiana slaughterhouse for less than $200 each after the Chinese buyer canceled the order within a week of China implementing retaliatory tariffs against the U.S. in April.

China is one of the biggest importers of American breeding pigs and other livestock genetic material such as cattle semen. These lucrative niche export markets had been growing, but dried up since U.S. President Donald Trump started a trade war with Beijing.

U.S. farmers and exporters said the dispute has already cost them millions of dollars and jeopardized prized trade relationships that took years to develop.

Though Washington and Beijing agreed to pause tariffs last week, exporters said Trump’s unpredictable trade policy has caused their companies long-term damage and could encourage China and other major buyers to turn to foreign rivals like Denmark.

“We’ve got brand damage now. There’s not a week that goes by without clients asking what’s happening with the U.S.,” said Tony Clayton, owner of Clayton Agri-Marketing, a Missouri-based livestock exporting company.

(Clayton Agri-Marketing, Inc.)

“I don’t know how we can put this back together. This is long-term damage,” he said.

White House spokesperson Kush Desai said the administration was “working around the clock to secure billions of dollars in even more opportunities with our other trading partners.”

Some farmers raise pigs specifically for breeding, a niche business within the $37 billion U.S. hog industry. Farmers pay top dollar for these specialty pigs, which have favorable genetics to produce lots of healthy piglets that can eventually be processed into tasty, high-quality pork.

Lemmon, an Indiana veterinarian and farm owner, has been selling pigs worldwide for over 30 years. He said he spent more than a year working on the $2.4 million sale of the pedigreed pigs to China. He noted they were carefully bred for good health, litter size and high fat content that leads to richly marbled, tender meat when cooked.

“It’s devastating when it happens,” Lemmon said, referencing the sale he lost.

He said he plans to stay in the breeding business, and is working to rekindle the deal with his Chinese buyer during the tariff pause.

(Clayton Agri-Marketing, Inc.)

Roughly half of the world’s pigs live on Chinese farms. The country has purchased large quantities of breeding pigs from the U.S. since an outbreak of African swine fever, a virus with a near-total fatality rate, wiped out millions of the country’s hogs in 2018.

Shipping livestock is lucrative but time-consuming. Shippers must personally fly with the animals or hire an on-board attendant who can make the rounds to keep their pricey passengers well-hydrated and comfortable during a long flight. When not working, the attendants chat with the flight crew or sometimes lie in sleeping bags next to the animals in the chilly cargo bay, exporters and farmers said.

China has also been the biggest importer of semen from U.S. dairy cows, known for producing large amounts of protein-rich milk. But “Not one unit of semen is going to China right now,” Jay Weiker, president of the National Association of Animal Breeders, said, noting China had been importing one-quarter of all U.S. cattle semen, which they use to artificially inseminate their dairy cows.

The Chinese milk industry began importing large amounts of cattle semen to improve the genetics of domestic dairy cows after a deadly scandal over contaminated milk in 2008, Weiker said. At least six children in China died and nearly 300,000 fell ill after a Chinese manufacturer added melamine, a dangerous chemical, to milk powder to make the protein levels appear higher.

Brittany Scott, owner of SMART Reproduction Services, a sheep and goat genetics company, said several foreign customers had also pulled out of deals. This left many vials of semen sitting in her Arkansas facility, frozen in tanks of liquid nitrogen and waiting for buyers.“They are eager to do their jobs,” Scott said of her male goats and sheep. “They understand the assignment and they do really well.”

However, the work of selling their product has proven harder after Trump announced sweeping tariffs in April, and China retaliated.

The lost sales have been “a punch in the gut,” Scott said.

(Reporting by Heather Schlitz. Editing by Emily Schmall and Tom Polansek; Editing by David Gregorio)

Your next read: Is Tariff Pause First Step to Restore Access to China for U.S. Pork and Beef?

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.

Your Next Read: An Incredible Birdseye Look at the State of the Dairy Industry

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.

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.”

Your Next Read: Economists Fear Trade War Will Push Agriculture Deeper Into a Recession

Mark Carney’s Liberal Win: What It Means for Canadian Agriculture and U.S. Relations

Fri, 02 May 2025 18:12:04 GMT

America’s neighbor to the north has elected a new leader. The result is not a huge surprise to farmers across Canada, but it’s fair to say Liberal Party leader and new Prime Minister Mark Carney likely wasn’t many farmers’ first choice, either.

“I would say farmers are frustrated with the track record of what the (Liberal) Party’s done for agriculture over the last 12 years, and they are probably pretty concerned if they’ll see any change over the next four years,” says Saskatchewan farmer Kristjan Hebert when asked how his farming brethren felt about the result.

Shaun Haney, founder of RealAgriculture and host of RealAg Radio , thinks the aggressive rhetoric from President Donald Trump around the U.S. possibly annexing Canada as the 51st state had an impact. The Conservatives had a large lead in many polls leading up to the election, but there was a seismic shift as Election Day approached.

“The Conservatives couldn’t get out of the trough of many Canadians making the assumption they were just going to roll over to President Trump, which I don’t think was true but definitely was the branding they were labeled with, and now Mark Carney’s first election is over and he’s going to be the prime minister,” he says.

(iStock/Lori Hays)

If there is a silver lining for conservative-leaning Canadian farmers, Haney views Carney as better equipped to manage the high-wire tightrope walk that is dealing with Trump. The U.S. President did back away from the 51st state rhetoric post-election, and the two men share similar backgrounds in global finance. There appears to be a degree of respect between the two.

“I think (Carney) has the opportunity to get some respect (from Trump) in the sense that he’s worked in those circles, but he has been very pro on the climate file, which he backed off during the election. He’s going to want to park that if he’s going to stay out of some of the ire of President Trump,” Haney adds.

Haney talked about the Canadian Election results on AgriTalk today. You can listen to the “Free for all Friday” discussion here:

From the farmer point of view, Hebert says there are actually a few Trump policies that he and many Canadian farmers support; he just wants more respect from the U.S. leader.

“I think most (Canadian farmers) would argue he has enough things to right on his own ship before he needs to worry about everybody else’s,” he says.

One ag market that may become a political football is the dairy industry. There is a lot of shared interests between the two countries in that realm, and Canada has slapped a protectionist 200% tariff on U.S. dairy exports for years, as Dairy Herd Management editor Karen Bohnert wrote in an analysis piece in March.

“Dairy’s going to be really fascinating,” Haney says. “One of the outcomes of the election is the Liberals are going to need support from some of the other parties. That’s going to come from the New Democratic Party or it’s going to come from The Bloc Quebecois, which is based in Quebec. And where is the Canadian Dairy lobby the strongest? Well, it’s in Quebec. So, it’s going to be really fascinating to see where they go on dairy negotiations.”

Another industry with close cross-border ties is the farm equipment manufacturing world. The tariff situation has hit that market with brute force. Many farmers are delaying purchases of new tractors, combines and sprayers until the situation clears up. Manufacturers have responded by laying off factory workers and slowing production of new machines.

An example of the cross-border journey of one piece of agriculture equipment from raw material to delivery on the farm.

(AEM)

RELATED - From the Factory to Your Fields: Where Farm Equipment Is Made

“Six or seven years ago, spending was full bore and it was a good time (in the industry),” Hebert says. “Right now, operations are really looking for efficiencies, and that includes asset turnover, capital utilization and the efficiency of production models. You’re going to see producers really focus on using every dollar to maximize efficiency because the margins just aren’t wide enough right now.”

Haney hopes both countries can come to the table and realize a united North America is stronger than one divided.

“This is a critical trading relationship and economic partnership between two countries that neighbor each other; there are bigger fish to fry,” he says. “China, Brazil and India — those are the countries where we need to be working together and focusing on a partnership, rather than battling each other.”

Your Next Read: Economists Fear Trade War Will Push Agriculture Deeper Into a Recession

Why Farmers are Flocking to Auctions for Low-Hour Equipment Deals

Thu, 24 Apr 2025 21:00:42 GMT

The used equipment buying season remains active as spring planting takes off. Farm equipment that is only a few years old with low operating hours continues to draw strong prices at auction.

Machinery Pete noticed that trend last week via a few record-setting transactions. At a Kiko Auctions sale in Diamond, Ohio, a pair of blue tractors and a blue planter raised the bar higher:

(Machinery Pete Facebook)

A 2013 New Holland T7 260 tractor with only 1,226 hours on it brought $152,000, which blasted past the previous record high for that year/model by over $19,000.

(Machinery Pete Facebook )

A 2015 New Holland T5 115 utility tractor with a loader (765 hours) brought in $75,000, beating the previous record high by $7,000.

(Machinery Pete Facebook)

A 2024 Kinze 3505 8/16 row planter with just over 170 acres planted on it sold for $100,000. That set a new record by $17,500.

“There’s a similar pattern here. Whether its blue, green or orange, if it’s got a few years on it with low hours and in nice condition, those prices are very strong right now,” Pete says.

Moving Iron host Casey Seymour, who has over 20 years of experience in the farm equipment dealership space, says there are more farmers hitting auctions than heading to the dealer lot, and that’s typical of a down cycle in the farm economy.

“Things at auction have a higher demand signal than what you see on the lot. When I was working at the dealership, I would see these sales and think, ‘Man, I’ve got five just like that sitting on my lot that I would sell to you for $10,000 less than what you bought that one for.’ But nobody’s coming to the table, and that’s just where we’re at right now,” he says.

Order-Writing Season For New
Aaron Fintel, used equipment specialist with 21st Century Wholesale – a John Deere dealer with 26 storefronts across Colorado, Nebraska and Kansas – joined the podcast to talk about the soon-to-open new machine order-writing period.

Fintel says it’s not something many think about when it comes to buying new, but farmers getting re-approved for financing has “been a process” this year.

“It’s kind of a two-edged sword. If you went and got that new machine at 0% interest at the end of last year because the accountant said to do it, I don’t care that it’s 0% because its also $450,000 sitting on the balance sheet,” he says. “That’s been a huge factor.”

Commodity Markets Update
Chip Nellinger, owner of Blue Reef Agri-Marketing, joined Seymour to wrap up this week’s episode with an update on the commodity markets.

When it comes to corn and soybean futures, Nellinger says there is still “a lot of uncertainty and volatility in the market” but he is seeing some potential upside with President Trump softening on the tariffs against China.

“The stock market seems to be signaling something has changed, and the bean market has been pretty resilient here over the last couple of days,” he says. “There has been a fair amount of activity in planting, and I think that’s why corn has relaxed. We’re ahead of average planting pace at 12% and that’s probably delayed a little bit. So, we should see a lot more progress in next week’s report.”

Nellinger says to keep an eye on the South, where higher-than-average moisture levels have delayed corn planting, and farmers might flip acres to beans or cotton – or even take prevent plant insurance.

Want more Moving Iron? Click this link to watch the episode in full here.

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

Wed, 23 Apr 2025 15:45:47 GMT

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

India is the United States’ top buyer of almonds.

(U.S. Almond Board )

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

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

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

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

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

(U.S. Apple Association )

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

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

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

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

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

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

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

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

Tariff Escalation Clouds the Outlook

Mon, 21 Apr 2025 18:50:07 GMT

After a long winter, farmers have returned to the fields for a new crop year, and milk production is racing higher to the peak output weeks of the year. Milk prices were relatively healthy in the first quarter of this year, and when coupled with welcomed lower feed costs, there were likely profits earned on dairies in most regions of the country. However, recent policy shifts have clouded the outlook for the months ahead, introducing demand uncertainty at a time when milk production and components are increasing. These wildcard factors are driving increased volatility and have forced markets lower in recent weeks, must the concern of farmers who were hoping for continued healthy margins throughout this year.

Increasing Milk Production and Supply Dynamics

On the supply side, milk production returned to growth this year, with volume up 0.5% in January followed by a leap-year adjusted 1% growth rate in February. Globally, production gains are expected as well, with RaboResearch expecting 0.8% YOY growth from the Big 7 export regions in 2025. Regardless of a limited supply of replacements, U.S. cow numbers grew quickly early this year, likely driven by farmers keeping cull rates low to drive as much milk volume as possible when prices were good. With this additional milk after three years of stagnation, the outlook shifts to demand expectations, with trouble brewing for the export markets.

Trade Policies and Their Ripple Effects

Since the U.S. presidential inauguration in January, a range of tariffs have been implemented, with some ongoing and others temporary. Initially, the focus was on China, Mexico, and Canada, key markets for U.S. dairy products. China has issued retaliatory tariffs on a wide variety of U.S. dairy products, making it more expensive for product to move to the country. So far, Mexico has avoided any retaliatory action, but the situation with both Canada and Mexico remains tenuous, with USMCA-covered products like dairy avoiding the worst of the tariff impacts for now. Attention now turns to the major announcement that came in early April: the U.S. will institute a 10% import tariff on goods from all countries, with certain higher tariffs on goods from more than 60 countries. The likelihood of retaliation is high, which could limit dairy exports moving forward. With more products to be consume domestically, markets have reacted accordingly lower.

It is frustratingly impossible to estimate how the trade situation will play out. CME Class III milk futures have sunk below $17 per hundredweight for May and June contracts, reflecting the uncertainty on the trade front. What was initially expected to be a healthy year for on-farm profitability is now being questioned after the increasing trade ambiguity. Thankfully, milk production growth is not overwhelming, and certainly, the tariff situation is ever evolving and could change quickly. Expect ongoing volatility in the short run, with market attention focused on forthcoming policy changes in the coming weeks.

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Will Tariffs Have an Impact on Dairy Demand?

Tue, 15 Apr 2025 19:59:29 GMT

Tariffs have been dominating the news, and the uncertainty of the impact of those tariffs on dairy export demand. For the present, it seems the only impact of certainty is China. Tariffs on U.S. imports have been implemented across the board. China is the largest importer of whey, whey protein concentrate +80, and lactose from the U.S., and could have a significant impact on those prices. Whey is a significant part of the Class III milk price calculation. It will be interesting to see whether increased demand may come from other countries.

Butterfat Exports Surge Amid Global Price Gap
Butterfat exports have increased dramatically recently, with February increasing by 5,979 metric tons or 224.5% over February 2024. Butterfat exports in February totaled 8,642 metric tons. This is the biggest monthly exports since April 2014. The reason for this is that the U.S. price is substantially under the world price.

The latest Global Dairy Trade auction showed an average butter price of $3.45 per pound. This compares with the butter price of $2.3475 per pound on April 11^th. But not only does that show a large difference, making it attractive to international buyers, but the average price of butter in Oceania in March was $7,548 per metric ton or $3.43 per pound compared to $7,294 per metric ton in February. The average price in March 2024 was $6,465 per metric ton or $2.94 per pound. There are a total of 14 countries that are within Oceania. These 14 countries include Australia, Papua New Guinea, New Zealand, Fiji, the Solomon Islands, Federated States of Micronesia, Vanuatu, Samoa, Kiribati, Tonga, the Marshall Islands, Palau, Tuvalu, and Nauru.

The average butter price for Western Europe was $8,103 per metric ton or $3.68 per pound, compared to $7,563 per metric ton in February. The average price in March 2024 was $6,302 per metric ton or $2.86 per pound. The Western European countries consist of Belgium, Germany, France, Liechtenstein, Luxembourg, Monaco, Netherlands, Austria, and Switzerland. With these substantially higher prices, any tariffs that may be implemented on countries may not make much difference due to the price difference, or even if dairy products are included in the tariffs.

Low Milk Prices Could Prompt Cow Culling
The lower milk prices that we will see may increase the culling of dairy cows in the months to come. Cows have been held due to the higher heifer prices and the high values being received for calves. However, low milk prices will cause producers to push the pencil to determine which cows are making money at lower milk prices. Culling has been below the previous year for the past 18 consecutive months, with cow numbers in February totaling 9.41 million head. This was 62,000 head more than February 2024. We may see cow numbers pull back in the near term.

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

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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Tariff Delays Offer Brief Relief, But Dairy Markets Remain on Edge

Thu, 10 Apr 2025 20:14:52 GMT

Tarriff talk continues to drive conversation as we learn new details every day. While markets responded positively to yesterday’s news of delays, continued pressure on China leaves the future of dairy prices up in the air. Trade was relatively quiet in Class III and IV, with most of the curve floating around unchanged on light volume despite strong buying on the spot market. In a market that can change with a social media post, fundamentals still point to more milk and more product.

Today’s Highlights from Ever.Ag’s Know Your Markets

After a relatively quiet first half of the week, CME butter volume picked up the pace, with 24 loads changing hands. The spot price gained two cents to close at $2.3325 per pound. Spot blocks jumped to $1.7400 per pound, adding $0.0325, while barrels ticked up to $1.7800 per pound, $0.0075 higher. Nine lots of blocks and four of barrels changed hands.

USDA’s April World Agricultural Supply and Demand Estimates report leaned bullish for corn, with both US and world ending stocks below expectations. Forecasts for US and global soybeans were more neutral and didn’t change much from March’s report. Post-report, corn and soybean futures climbed across the board.

Inflation cooled slightly in March, with prices down 0.1% on the month but up 2.4% year-over-year compared to +0.2% and +2.8% in February. Grocery prices got a bit more expensive. The food-at-home index advanced 0.5% month-over-month and +2.4% on the year. In February, grocery prices were flat on the month and +2.4% compared to 2024. Eggs came in at $6.23 per dozen, a new record and up 108% year-over-year. Restaurant prices ticked up 0.4% versus February and +3.8% year-over-year, virtually unchanged from +0.4% and +3.7% the previous month.

Ever.Ag - The risk of loss trading commodity futures and options can be substantial. Investors should carefully consider the inherent risks in light of their financial condition. The information contained herein has been obtained from sources to be reliable, however, no independent verification has been made. The information contained herein is strictly the opinion of its author and not necessarily of Ever.Ag and is intended to be a solicitation. Past performance is not indicative of future results.