dairy tariffs

Slide 5: Slide 5
Slide 5: Slide 5
Style_Bullvine: Style_Bullvine
Slide 8: Slide 8
Slide 7: Slide 7

Archive for dairy tariffs

Tariffs: The Hidden Hand Milking Your Bottom Line

Tuesday, April 15th, 2025

Trade wars aren’t just political—they’re squeezing milk checks & reshaping global dairy markets. Here’s how tariffs gut farmer profits.

Dairy tariffs, global dairy trade, tariff impact on farmers, milk price volatility, dairy market access

Tariffs aren’t just political chess pieces—they’re the invisible hand squeezing your milk check, shifting global demand, and upending the delicate balance of supply and demand that every dairy farmer depends on. If you think tariffs are just a problem for the big processors or exporters, think again. Whether you’re running a 100-cow tie-stall in Wisconsin or a 10,000-cow rotary in New Zealand, trade barriers are quietly shaping the price you get for every hundredweight of milk, the cost of your feed, and even the genetics you can access. It’s time to challenge the old thinking: tariffs are not a distant policy issue—they’re as real as a dropped bulk tank and as disruptive as a power outage during morning milking.

Tariffs: The “Somatic Cell Count” of Global Dairy Trade

Let’s call it what it is: tariffs are the somatic cell count of the global dairy market. You might not see them in the parlor, but they’re always lurking, quietly eroding the quality and value of your product. Like a high SCC can tank your milk price and limit market access, tariffs quietly raise costs, block exports, and force you to dump milk into lower-value channels.

Here’s the hard truth no one’s telling you: The dairy industry has become addicted to protectionism like a cow hooked on grain overload. We keep reaching for the same old solutions even when they make us sick.

What Are Tariffs?

In dairy terms, a tariff is like a penalty on your best-show cow just because she was bred on the wrong side of the fence. It’s a tax slapped on imported goods—cheese, butter, milk powder—by governments trying to “protect” their producers. But here’s the kicker: the cost is almost always passed down the line, landing squarely on the shoulders of farmers and consumers.

There are three main types of tariffs you need to know:

Ad Valorem Tariffs: A percentage of the product’s value. Think of it as a 15% “milk check deduction” on every imported block of cheese.
Specific Tariffs: A flat fee per unit—like $0.50 per kilo of butter, no matter the market price.
Compound Tariffs: The worst of both worlds—percentage plus a flat fee.

And then there’s the infamous Tariff Rate Quota (TRQ)—the quota system of the global market. It’s like a milk-based program: you can ship a certain amount at a fair price but go over your quota, and you’re hammered with a penalty that is so steep it’s not worth hauling the load.

Ask yourself this: If tariffs are so great for dairy farmers, why are we still seeing record farm closures despite decades of “protection”?

How Tariffs Play Out in the Real World: From the Bulk Tank to the World Market

The US-China Cheese Standoff: When Your Best Customer Slams the Door

Remember when US whey and lactose exports to China fell off a cliff in 2018-2019? That wasn’t just a blip. When China slapped retaliatory tariffs on US dairy, dry whey and permeate exports dropped by 55%, while lactose exports dropped by 33%, according to the US Dairy Export Council.

Fast forward to April 2025: US dairy exports to China now face tariffs as high as 125% following a rapid escalation of trade tensions. As reported by Dairy Reporter, China initially imposed a 34% additional tariff on April 4, 2025, which was quickly raised to 84% by April 9, bringing the total effective rate to 94%. After further escalation, the rate reached a prohibitive 125%. Meanwhile, New Zealand’s pasture-based herds are shipping product into China tariff-free, thanks to their upgraded FTA that took effect January 1, 2024. It’s like showing up at the sale barn with a load of high-genomic heifers, only to find out the buyers already filled his quota with someone else’s stock—at a better price.

The industry keeps telling you that China is the future of dairy exports. But what good is that future if we’re locked out by triple-digit tariffs while our competitors walk in the front door? According to USDA data, China represents the third-largest market for US dairy, worth $584 million in 2024.

Canada’s TRQ Shell Game: The “Milk Base” of International Trade

If you think USMCA opened the Canadian market, think again. Canada’s TRQ system is the ultimate “milk base” on steroids. The US can ship more cheese and butter north of the border, but 85-100% of those quota licenses go to Canadian processors, not retailers. That’s like letting the co-op decide who gets to sell milk at a premium, and surprise—they pick themselves.

The result? US exporters fill only 21-42% of their quota, even when US cheese is cheaper than Canadian. The rest of the market is tighter than a dry cow in December. And those over-quota tariffs? They’re astronomical ranging from 241% for fluid milk to 298.5% for butter, according to Hoard’s Dairyman.

Let’s be brutally honest: Our trade negotiators got outplayed by Canada. They came home bragging about market access that exists only on paper, not in reality. How many more rounds of this game will we play before we demand real results?

EU-US Cheese Wars: When Steel Tariffs Spoil Your Cheese Plate

Have you ever had a trade dispute over steel and aluminum costing you cheese sales? Welcome to the EU-US standoff. The US slaps tariffs on EU steel, the EU fires back with tariffs on US dairy. In March 2025, the US administration reinstated and expanded Section 232 tariffs on EU steel and aluminum. The EU responded with retaliatory measures targeting approximately €18 billion in US goods, including dairy products.

This is the insanity of modern trade policy: We’re sacrificing dairy exports to protect steel mills. When was the last time a steel executive worried about your milk price?

The Ripple Effect: How Tariffs Hit Your Farm—Even If You Never Export

You might be thinking, “I don’t export. Why should I care?” Here’s why:

Milk Price Pressure: When export markets close, processors are left with surplus products. That’s more milk powder, cheese, or whey flooding the domestic market, driving down the mailbox price for everyone. Every farmer in America takes a hit when exports fall, whether you know it or not. As Hoard’s Dairyman notes, when the US faces tariffs as an exporter, we could face a “double hit: falling world market prices and reduced competitiveness in key importing countries.”
Feed and Input Costs: Tariffs on imported feed ingredients, machinery, or even replacement parts for your parlor can jack up your cost of production. It’s like paying more for every load of soybean meal or every new milking unit. The tariffs you don’t see often cost you the most.
Genetics and Technology: Tariffs can limit access to the best genetics, semen, or dairy tech from overseas. Imagine being stuck with last year’s sires while your competitors use the latest Net Merit $ leaders.

Bottom line: Tariffs are like a leaky bulk tank—you might not see the drip, but you’re losing real money over time.

Here’s what the industry consultants won’t tell you: For all the talk about “protecting American dairy,” tariffs often protect everyone except the farmer. The processor, the retailer, and the input supplier all find ways to pass costs along. The farmer? We’re price takers at both ends.

Tariffs vs. Free Trade: A Table for the Milking Parlor

Issue	Tariffs/Protectionism	Free Trade/Market Access
Milk Price Stability	Short-term support, but risk of oversupply and price crashes when markets close	More volatile, but higher prices when global demand is strong
Input Costs	Often higher due to tariffs on feed, equipment, or genetics	Lower, thanks to global competition and access
Innovation	Slower—less incentive to improve when protected	Faster—must compete with the best globally
Market Access	Limited—hard to grow or diversify	Wide open—can chase the best-paying markets
Risk of Retaliation	High—other countries target your exports	Lower—fewer trade disputes

The question isn’t whether we should have protection or free trade. It’s whether the security we have is protecting the right people. Right now, the answer is a resounding NO.

Tariffs and the Dairy Value Chain: From Grass to Glass, Everyone Pays

Think of the dairy value chain as a pipeline: from the forage you grow to the cows you feed, to the milk you ship, to the cheese on a consumer’s plate in Tokyo or Toronto. Tariffs are like a valve that gets cranked shut at the border. The pressure builds up behind it—milk backs up, prices drop, and everyone from the feed mill to the farm gate feels the squeeze.

Processors: Lose export sales, run plants below capacity, and cut premiums.
Farmers Get hit with lower base prices, more deductions, and sometimes even forced dumping.
Consumers: Pay more for imported cheese, butter, or specialty products—or lose access altogether.

The industry elite keeps telling us that tariffs protect farmers. But when was the last time you felt protected? When was the last time your milk check reflected all this “protection” we supposedly have?

Real-World Analogies: Tariffs Are the “Mastitis” of Global Dairy

Just as mastitis quietly robs you of yield and quality, tariffs quietly erode your market access and profitability. You can’t see the infection until the SCC spikes and the milk check shrinks. By the time you notice, the damage is done.

High tariffs = chronic infection: Hard to treat, slow to recover, and constantly threatening to flare up.
TRQs = selective dry-off: Only a few cows (products) get to keep milking at full price; the rest are sidelined.
Retaliatory tariffs = contagious outbreak: One country’s move triggers a chain reaction, spreading pain across the whole herd (market).

And just like with mastitis, the industry’s approach to tariffs is stuck in the dark ages. We keep applying the same old treatments even when they’re not working. We’re treating subclinical tariff problems with clinical-strength protectionism, and the side effects are killing us.

Precision Dairy Farming Meets Global Trade: Why Data Matters

Today’s top herds use precision dairy tech—automated milk meters, activity monitors, and genomic testing—to squeeze every efficiency drop from each cow. However, all that investment is at risk if tariffs block access to the best markets or the latest technology.

Imagine investing in a new rotary parlor or robotic milking system, only to find your milk price hammered by a trade war. Or breeding for high Cheese Merit $ sires, only to see cheese exports dry up because of a tariff spat. That’s like prepping your show string for the World Dairy Expo, then getting locked out at the gate.

Here’s the disconnect no one talks about: We’re pushing farmers to invest in cutting-edge technology and genetics to compete globally while supporting trade policies that slam the door on global markets. How does that make any sense?

The Global Dairy Export Game: Who’s Winning, Who’s Losing?

Let’s break it down like a DHI test sheet:

New Zealand: Pasture-based, low-cost, and now shipping tariff-free to China. Their cows are grazing on green grass while US and EU herds are stuck in the barn. They’re playing chess while we’re playing checkers. New Zealand has secured a dominant position with around 46% of China’s dairy import market.
European Union: Big on cheese exports but facing tighter environmental regs and trade headwinds. Their TRQ system is as complex as a sire summary, but they know how to play the game. They protect their farmers while still dominating global markets. Why can’t we?
United States: Huge on protein and fat production—108% and 101% of domestic needs, respectively, according to Hoard’s Dairyman. But when export doors slam shut, that surplus turns from asset to liability overnight. We’re producing for a global market but acting like it’s still 1980.

The hard truth: While we’ve been busy “protecting” our industry, our competitors have taken our markets. New Zealand didn’t become a dairy powerhouse by accident—they embraced global trade while we clung to protectionism.

What’s the Fix? Don’t Just Patch the Pipe—Rethink the System

Here’s the hard truth:
Tariffs might offer a short-term Band-Aid but are no substitute for a healthy, competitive dairy sector. Just like you wouldn’t treat chronic mastitis with a single shot of penicillin, you can’t fix global dairy trade with tariffs alone.

What can you do?

Diversify your markets: Don’t rely on one buyer or one country. Spread your risk like you spread manure—broadly and strategically. Are you asking your co-op or processor about their export strategy? You should be. The International Dairy Foods Association has urged the administration to “quickly resolve the ongoing tariff concerns with Canada, Mexico, and China – America’s top agricultural trading partners.”
Invest in value-added: Specialty cheeses, high-protein ingredients, and branded products can command premiums even in tough markets. The commodity trap is real, and tariffs only make it deeper.
Advocate for fair trade: Push your co-op, processor, and industry groups to fight for real market access—not just lip service. Demand that your representatives prioritize dairy in trade negotiations instead of treating it as an afterthought.
Stay informed: Know your numbers, watch global trends and be ready to pivot. The best herds are the ones that adapt fastest. Are you still making decisions based on yesterday’s market realities?

The Bottom Line: Don’t Let Tariffs Milk You Dry

Tariffs are the silent drain on your operation’s profitability. They’re as real as a broken agitator and as disruptive as a power outage at 4 a.m. Don’t let old-school thinking lull you into complacency. Whether you’re a small family farm or a mega-dairy, the global market is your market—and tariffs are everyone’s problem.

It’s time to call BS on the industry’s tariff addiction. We’ve been fed the same line for decades: “Tariffs protect American dairy farmers.” If true, why are we losing farms at a record pace? Why are our export markets shrinking while our competitors thrive? Why are our input costs rising faster than our milk checks?

Call to Action:
Talk to your co-op board. Ask your processor about the export strategy. Get involved in policy discussions. And above all, demand a dairy trade policy that works for farmers, not just processors and politicians.

The next time someone tells you that tariffs protect your farm, ask them: “Protecting me from what? Profitability? Market access? A future for my children in dairy?”

Because in today’s world, if you’re not fighting for your market, someone else’s cow is eating your lunch.

Key Takeaways:

Tariffs backfire: “Protectionist” policies often crush farm profits via retaliatory measures and supply chain bottlenecks.
Trade diversion rewards competitors: New Zealand’s FTA-driven dominance in China highlights the cost of stalled U.S. trade deals.
TRQs are Trojan horses: Complex quota systems (e.g., Canada’s) mask protectionism, blocking retail-ready U.S. products.
Diversify or die: Southeast Asia and Latin America offer growth as traditional markets fracture.
Advocate fiercely: Push for fair trade policies—or watch margins evaporate in tariff crossfires.

Executive Summary:
Escalating tariffs between the U.S., China, EU, and Canada are destabilizing dairy markets, slashing export opportunities, and inflating costs for farmers and consumers. Retaliatory measures like China’s 125% tariffs lock U.S. dairy out of key markets, while New Zealand’s duty-free FTAs steal competitive ground. TRQ systems, like Canada’s, create illusory market access through restrictive quotas and megatariffs. Farmers face a “double jeopardy” of lost exports and higher input prices, while processors battle supply chain chaos. The article urges diversification into emerging markets, policy reform, and value-added innovation to survive the tariff storm.

Learn more:

How Trump’s Tariffs Threaten Your Herd’s Bottom Line
A deep dive into how recent U.S. tariff policies and global retaliation are squeezing farm profits, with real-world farmer perspectives and export data.
Global Dairy Markets April 7th, 2025: Regional Divergence Amid Trade Tensions
Analyzes how trade wars are splitting global dairy markets, with Europe slumping, Oceania booming, and U.S. cheese exports adapting to new tariff realities.
Dairy Caught in Trump’s Tariff Crosshairs as Rollins Teases Trade Deals by Friday
Explores the immediate fallout from 104% tariffs on Chinese imports, survival strategies for producers, and the high-stakes push for new trade agreements.

Join the Revolution!

Join over 30,000 successful dairy professionals who rely on Bullvine Daily for their competitive edge. Delivered directly to your inbox each week, our exclusive industry insights help you make smarter decisions while saving precious hours every week. Never miss critical updates on milk production trends, breakthrough technologies, and profit-boosting strategies that top producers are already implementing. Subscribe now to transform your dairy operation’s efficiency and profitability—your future success is just one click away.

Categories : Politics

Tags : dairy tariffs, global dairy trade, milk price volatility, tariff impact on farmers

Trade War Redux: Why Milk Prices Already Dropped 12% Before Tariffs Hit

Wednesday, April 9th, 2025

Trump’s tariffs spark 12% milk price crash. With 43% of dairy exports at risk, can farmers survive the trade war?

EXECUTIVE SUMMARY: The U.S. dairy industry faces mounting pressure as President Trump’s tariffs trigger a 12% milk price drop before implementation, jeopardizing $8.2B in annual exports. Mexico and Canada—which buy 43% of U.S. dairy exports—face retaliatory risks, while China’s 125% tariff hike worsens tensions. Farmers already report rising input costs (e.g., $21k steel tariff impacts) and potential annual losses up to $56k for mid-sized operations. Industry groups warn of long-term market damage, urging producers to hedge prices, diversify markets, and leverage USDA safety nets. The 90-day tariff pause offers fleeting relief, but survival hinges on rapid adaptation to volatile trade policies.

KEY TAKEAWAYS:

Preemptive Price Plunge: Milk futures dropped 12% on tariff threats alone, outpacing 2018 trade war impacts.
Export Addiction: 15-20% of U.S. milk production is exported, with Mexico ($2.47B) and Canada ($1.14B) as lifelines.
Canada’s TRQ Trap: Despite USMCA, administrative barriers block U.S. access to Canada’s “0% tariff” quotas.
Small Farm Crisis: Tariffs could slash $56k/year from mid-sized farms, exacerbating existing financial strains.
Survival Playbook: Lock contracts, hedge prices, and target Southeast Asia to offset North American trade risks.

The U.S. dairy industry faces unprecedented challenges as new tariff policies threaten $8.2 billion in annual exports. With Mexico and Canada representing over 40% of export value, dairy producers must navigate market volatility while preparing for potentially prolonged trade disputes—all while milk prices have already dropped 12% since February.

As President Donald Trump implements aggressive trade policies, the U.S. dairy industry is walking a precarious tightrope. On April 9, 2025, Trump announced a 90-day pause on most tariffs while raising the tariff rate on Chinese imports to 125%. This strategic pivot comes after weeks of escalating tensions that began when Trump imposed 25% tariffs on all Canadian and Mexican goods on March 4.

Historical Context: We’ve Been Here Before

The current tariff scenario is like policies implemented during Trump’s first administration. During that period, tariffs significantly impacted milk prices, prompting federal compensation programs to offset losses for producers.

“Tariffs make you a little bit nervous when you’re an American farmer,” says Hans Brighton, who owns a dairy farm with about 460 cows in Merill, Wisconsin. This sentiment reflects widespread concern throughout America’s dairy regions.

The use of tariffs as negotiation leverage isn’t new. During the United States-Mexico-Canada Agreement (USMCA) negotiations, tariff threats were leveraged to secure concessions, ultimately improving market access for some dairy products but creating significant short-term disruptions.

Current Market Dynamics: The Damage Is Already Done

The mere discussion of new tariffs has already impacted dairy markets. Since Trump first credibly threatened tariffs in early February, May Class III and Class IV milk futures have lost 12% and 9% of their value, respectively. This price volatility highlights the immediate responsiveness of agricultural markets to trade policy announcements, even before implementation.

“We’re facing a double challenge — lower prices coupled with increasing costs,” explains AJ Wormuth, who manages 3,600 dairy cows at Half Full Dairy in upstate New York. He accelerated a barn renovation after being informed that the cost of new metal stalls would increase by $21,000 due to Trump’s 25% tariffs on steel and aluminum.

The stakes are particularly high for the dairy industry, which has grown increasingly export-dependent. U.S. dairy exports reached $8.2 billion in 2024; the second-highest total export value ever recorded. Nationally, the sector exports 15% to 20% of dairy production, making international markets a key demand factor for financial success.

Country	Export Value (USD)	% of Total Exports	Key Products
Mexico	$2.47B	30.0%	Cheese, NFDM/SMP
Canada	$1.14B	13.9%	Fluid Milk, Yogurt
China	$584M	7.1%	Whey, Infant Formula
Japan	$394.6M	4.8%	Cheese, Butter
South Korea	$385.7M	4.7%	SMP, Lactose
Total Global	$8.22B	100%

The Canada Conundrum: Beyond the 250% Headlines

Trump’s criticism of Canada’s dairy tariffs—reaching as high as 298% for butter and 270% for dairy powder—is technically accurate but lacks essential context. These high rates only apply when imports exceed established tariff-rate quotas (TRQs). Under the USMCA, U.S. dairy products can enter Canada duty-free or with minimal tariffs until specific quotas are reached.

“[Canada] has a large dairy-producing constituency that it wants to protect, so they put a cap on imports that can be accessed at a competitive rate. That’s a ‘TRQ’ (tariff rate quota),” explains Becky Randall Vargas, senior vice president of trade and workforce policy at the International Dairy Foods Association.

The issue isn’t just the tariff rates but administrative barriers that make it difficult for U.S. exporters to fully utilize their quota access, including requirements to sell directly to Canadian competitors and restrictions on retailers obtaining import licenses.

Product	Tariff-Rate Quota (TRQ)	Within-Quota Tariff	Over-Quota Tariff
Fluid Milk	64,500 metric tons	0%	241%
Cheese	12,500 metric tons	0%	245.5%
Butter	3,200 metric tons	7.5%	298.5%
Skim Milk Powder	14,000 metric tons	0%	270%

Voices from the Front Lines: Small Farms Hit Hardest

For smaller operations, the concerns are especially pressing. Annie Watson, who operates an organic dairy farm in Maine with 70 cows, highlights the longer-term planning challenges: “As dairy farmers, we work within three-year cycles — from the birth of a calf until it becomes a milking cow. Things don’t happen quickly on our farms, so when policies are implemented swiftly, it poses challenges for those engaged in this cycle.”

Near the Canadian border, Watson sources most of her feed from Canada. She calculates that the tariffs could increase her grain expenses by $1,200 monthly. “It would be more manageable if many of our organic dairy farmers weren’t already financially struggling due to market conditions,” notes Watson, who also leads the Maine Dairy Association.

Leonard Poen of the University of Wisconsin-Madison extension says retaliatory tariffs could decrease the income of a medium-sized farm in Wisconsin with about 250 cattle by up to $56,000 per year. “I don’t think any part of the supply chain is going to be insulated from this,” he warns.

Industry Response: Balancing Trade Fairness with Market Stability

The American Farm Bureau Federation, the primary agricultural lobbying group, has indicated that the tariffs jeopardize the competitiveness of U.S. farmers and could inflict long-term harm by diminishing their market presence.

“We align with the administration’s aim of creating a fair, competitive environment with our global counterparts, yet the rise in tariffs jeopardizes the economic viability of farmers who have faced financial losses on most major crops over the past three years,” stated Zippy Duvall, the organization’s president.

The National Farmers Union offers a different perspective, pointing to underlying structural issues: “Policymakers are focused on U.S. trade policy without solving the underlying problems in the dairy industry—corporate consolidation and continued overproduction. Broad dairy tariffs don’t solve these problems; they destabilize the industry, drive up costs, and create more uncertainty for American dairy farmers, processors, and rural communities,” stated NFU President Rob Larew.

The China Factor: 125% Tariffs Raise the Stakes

While Trump’s pause on most tariffs may provide temporary relief, the escalation with China to a 125% tariff rate represents a significant intensification of trade tensions. This is particularly concerning given that U.S. dairy exports to China declined in 2024, marking the lowest year since 2020.

The targeted approach represents a narrowing of an unprecedented trade war between the U.S. and most of the world to one between the U.S. and China. This strategic pivot may reduce widespread market disruption but could further complicate dairy exports to the Chinese market.

China has already announced retaliatory measures, including a 34% additional tariff on all U.S. goods and export restrictions on rare earth materials. These actions are part of a broader pattern of escalation that began in February 2025 and has intensified through April.

Year	Export Value (USD)	Annual Change	Key Driver
2020	$6.81B	+4.2%	Chinese Whey Demand
2022	$9.70B	+18.1%	Post-Pandemic Recovery
2024	$8.22B	+2.8%	Record Cheese Exports
CAGR	+4.6%

Tariff Survival Checklist: Protecting Your Operation

As trade tensions escalate, here are five immediate actions dairy producers should consider:

Lock in contracts now: If possible, secure export contracts before tariffs take full effect
Monitor futures markets weekly: Set price alerts and consider hedging strategies
Evaluate your export exposure: Calculate what percentage of your milk goes to export markets
Explore USDA risk management programs: The Dairy Margin Coverage program provides a safety net
Diversify export destinations: Consider emerging markets in Southeast Asia less affected by current tariffs

“For the third straight year, farmers are losing money on almost every major crop planted,” Zippy Duvall of the American Farm Bureau notes. “Adding even more costs and reducing markets for American agricultural goods could create an economic burden some farmers may not be able to bear.”

The Bottom Line

The U.S. dairy industry is walking a precarious tariff tightrope as it navigates the reintroduction of aggressive trade policies under Trump’s second administration. The 90-day pause announced on April 9 provides a reprieve for most trading relationships, but uncertainty remains the prevailing market condition.

The lessons from Trump’s first term are clear for dairy producers: tariffs can be effective negotiation tools but often come with significant short-term costs to agricultural sectors. The industry’s growing export dependence makes it particularly vulnerable to trade disruptions, with even threats of tariffs capable of triggering market downturns.

What This Means for Your Operation: Contact your congressional representatives through the National Milk Producers Federation’s advocacy portal by April 30 to voice concerns about tariff impacts. Review your export contracts for force majeure clauses that trade disputes might trigger. Consider attending the USDA’s upcoming June 2025 tariff mitigation webinar to learn about compensation programs that could offset market losses.

The following 90 days will be critical—monitor developments closely and prepare contingency plans for best and worst-case scenarios. Your farm’s financial survival may depend on how quickly you adapt to this rapidly changing trade landscape.

Learn more:

Trump’s Liberation Day Tariffs: A $8.2B Gamble for Dairy Farmers – Examines how retaliatory tariffs threaten $8.2 billion in U.S. dairy exports and provides survival strategies amid H5N1 outbreaks and collapsing milk prices.
GLOBAL DAIRY MARKETS ROCKED: US-China-Canada Tariff War Sends Shockwaves Worldwide – Explores how the trade clash impacts milk prices and farm incomes worldwide, with analysis of opportunities for European and Oceania producers.
Dairy Caught in Trump’s Tariff Crosshairs as Rollins Teases Trade Deals by Friday – Breaking news on Agriculture Secretary Brooke Rollins hinting at potential trade deals by week’s end as 70 nations seek negotiations amid the implementation of 104% tariffs.

Join the Revolution!

Categories : Politics

Tags : agricultural tariffs, dairy exports, dairy tariffs, milk price drop, Trump trade war

Trade War or Opportunity? Trump’s Dairy Tariff Threat Impacts Farmers on Both Sides of the Border

Thursday, March 20th, 2025

Trump’s tariff tantrum exposes the dairy dilemma: Can two nations with completely different systems avoid a trade war that hurts farmers on both sides?

dairy tariffs, Trump Canada dairy, supply management system, CUSMA dairy, US-Canada dairy trade

The fat lady is warming up to sing for the North American dairy trade relationship, and her name is Donald Trump. On March 7, 2025, the U.S. President threatened to impose identical reciprocal duties on Canadian dairy products, declaring, “Canada has been taking advantage of us for years with their tariffs on lumber and dairy.” This isn’t just another Trump temper tantrum – it represents a critical moment for dairy farmers on both sides of the 49th parallel who face very different but equally challenging realities.

Canada’s supply management system has provided stability for its dairy farmers for decades, while America’s market-driven approach has created a landscape of brutal competition, consolidation, and overproduction. As international pressure mounts and CUSMA negotiations loom, both nations’ dairy sectors face a stark choice: evolve together or continue a damaging cycle of retaliation.

TARIFF THEATRICS: WHAT’S REALLY AT STAKE

“Canada must immediately drop their Anti-American Farmer Tariff of 250 percent to 390 percent on various U.S. dairy products, which has long been considered outrageous,” Trump wrote on Truth Social this March. In the Oval Office, he doubled down, claiming these tariffs “go up to 400 percent — you never hear of that.”

What Trump doesn’t mention – and most Americans don’t realize – is that these prohibitive Canadian tariffs only kick in after the U.S. has hit its negotiated tariff-free quota amounts under CUSMA. The most striking fact? According to Philippe Charlebois, spokesperson for the Canadian Dairy Commission: “To date, 100 percent of U.S. dairy imports to Canada were made free of tariff.”

“To date, 100 percent of U.S. dairy imports to Canada were made free of tariff.” — Philippe Charlebois, Canadian Dairy Commission

THE TARIFF TRUTH: BY THE NUMBERS

Dairy Product	Within-Quota Tariff	Over-Quota Tariff	Trump’s Claim
Milk & Cream (most types)	7.5%	241.0%	“390-400%”
Some Milk-based Fats/Oils	Varies	313.5%	“390-400%”
Butter	0%	298.5%	“390-400%”
Cheese	0%	245.5%	“390-400%”

Sources: Global Affairs Canada Tariff Schedule, Global News reporting

THE 2026 CHESS MATCH: WHO BENEFITS?

The April 2 tariff deadline isn’t about immediate retaliation—it’s about positioning for the CUSMA review coming in 2026. For Canadian farmers, the stakes are existential—preserving a system that has maintained rural communities and stable prices. For American producers, it’s about gaining greater access to a profitable market at a time when they face massive challenges at home.

A February 2025 Texas Tech University study found that U.S. dairy exports to Canada increased by 34% ($519 million) since CUSMA implementation—significant growth but below the 43% increase initially forecast by the U.S. International Trade Commission. The difference? “Canada kept its commitment partially, not fully,” according to researchers, with quota allocations “mostly favoring its processors over U.S. exporters targeting the retail market.”

US DAIRY’S REAL CRISIS: NOT JUST ABOUT CANADA

Because of Trump’s focus on Canadian tariffs, America’s dairy farmers face much more significant problems at home. The National Farmers Union’s President, Rob Larew, recently stated: “Policymakers are focused on U.S. trade policy without solving the underlying problems in the dairy industry—corporate consolidation and continued overproduction.”

Larew points to a sobering statistic: “The number of U.S. dairy farms has plummeted by 84% since 1992, and tariffs only add to the uncertainty, making it even harder for family farmers to stay in business.”

“Policymakers are focused on U.S. trade policy without solving the underlying problems in the dairy industry—corporate consolidation and continued overproduction.” —National Farmers Union President Rob Larew.

Even Washington State dairy farmers, who would theoretically benefit from increased Canadian market access, are skeptical about the impact of Trump’s tariff threats. “I think it’s a matter of access to their market more than being concerned about how they compete in our own,” explains Dan Wood, Washington State Dairy Federation Executive Director.

SIZE MATTERS: THE SCALE DISPARITY

Metric	Canada	United States	Wisconsin Alone
Total Milk Production (2024)	9.4 billion liters	103.4 billion liters	14.5 billion liters
Number of Dairy Farms	9,952	30,085	6,953
Average Herd Size	104 cows	316 cows	191 cows
Average Production Per Farm	945,000 liters/year	3.4 million liters/year	2.1 million liters/year
Average Farm Gate Price (2024)	$0.88 CAD/liter	$0.52 CAD/liter*	$0.52 CAD/liter*

Sources: Canadian Dairy Commission, USDA, Dairy Farmers of Canada, Statistics Canada
*Note: US prices converted to CAD and liters for comparison purposes

This table reveals the fundamental challenge: The state of Wisconsin alone produces more milk than all of Canada. As Pascal Thériault of McGill University points out, “Thinking you will open the Canadian market to U.S. milk and it will solve the U.S. farmers’ problem in dairy doesn’t stand.”

RURAL REALITIES: DIFFERENT SYSTEMS, SHARED CONCERNS

On both sides of the border, dairy farmers worry about the future of rural communities.

For Canadian farmers like Quebec’s Markus Schnegg, nearly all domestic dairy production is consumed within Canada, meaning Trump’s tariffs would affect only a tiny fraction of the market. Their genuine concern is the potential dismantling of supply management – the system that has preserved small and medium-sized dairy operations across rural Canada.

Labor analyst Thomas Fellows paints a concerning picture for U.S. farmers: “One thing that could happen is that with fewer export opportunities, U.S. dairy farmers may face an oversupply, which could push down milk prices domestically, hurting smaller farms in particular. In the long run, however, if low prices persist, small and medium-sized dairy farms may shut down due to financial losses.”

A FOUR-POINT PLAN FOR NORTH AMERICAN DAIRY COOPERATION

Rather than a destructive tariff war, both American and Canadian farmers could benefit from a cooperative approach:

Gradual Market Evolution: A long-term transition (15-20 years) that gives farmers on both sides time to adapt without sudden shocks.
Addressing Overproduction: Collaborative policies to tackle the real crisis in U.S. dairy – chronic overproduction that devastates farm prices.
Value-added Focus: Joint initiatives to develop specialty products where North American dairy can compete globally against European and Oceanian producers.
Rural Transition Support: Programs that help dairy-dependent communities on both sides of the border build resilience through diversification.

“A prolonged tariff war with our top trading partners will continue to create uncertainty and additional costs for American dairy farmers, processors, and rural communities. We urge Canada and the United States to negotiate a resolution to these issues.” — International Dairy Foods Association.

THE BOTTOM LINE: FARMERS OVER POLITICS

The dairy industries in both countries stand at a crossroads. Trump’s April 2 tariff deadline is just the beginning of what could be years of destructive trade tension.

The hard truth is that neither blunt force tariffs nor rigid protection of the status quo will serve farmers well. As the International Dairy Foods Association stated, “A prolonged tariff war with our top trading partners will continue to create uncertainty and additional costs for American dairy farmers, processors, and our rural communities.”

The absolute priority shouldn’t be scoring political points but creating dairy systems on both sides of the border that ensure family farmers can thrive in rural communities while adapting to 21st-century market realities. The question isn’t whether Canada’s system or America’s approach is superior – it’s how we can learn from each other to create something better for farmers in both nations.

KEY TAKEAWAYS

Scale disparity is fundamental: Wisconsin alone produces more milk than all of Canada combined, meaning Canadian market access can’t solve America’s overproduction crisis
Both systems have failed farmers differently: Canadian supply management creates millionaire farmers but locks out new entrants, while America’s free market approach has eliminated 84% of dairy farms since 1992
Political rhetoric masks economic reality: Trump’s tariff threats focus on high over-quota tariffs that have never actually been paid, as U.S. exports haven’t exceeded duty-free quotas
Rural communities are the real stakeholders: Dairy farmers in both countries share concerns about preserving rural economies despite different regulatory approaches
The path forward requires cooperation: A gradual 15-20 year transition with policies addressing overproduction, value-added product development, and rural support would benefit farmers on both sides more than tariff wars.

EXECUTIVE SUMMARY: As Trump threatens 250% retaliatory tariffs on Canadian dairy imports, farmers on both sides of the border face a pivotal moment in North American dairy trade relations. While Canada’s supply management system has created stability at the cost of innovation, America’s market-driven approach has produced scale but devastating overproduction that crushes prices. The article reveals that despite Trump’s claims, 100% of U.S. dairy imports to Canada currently enter tariff-free under negotiated quotas, with exports to Canada increasing 34% since CUSMA implementation. Neither system is working perfectly for farmers, and the upcoming 2026 CUSMA review presents an opportunity to develop collaborative solutions that preserve rural communities while addressing chronic market failures rather than engaging in destructive tariff wars.

Learn more:

TRUMP’S 250% DAIRY TARIFF THREAT: What’s Really at Stake for Your Farm – With President Trump threatening 250% retaliatory tariffs starting April 2, producers on both sides face significant market disruptions that could permanently alter North American dairy trade patterns.
DAIRY TARIFF TSUNAMI: Kerrygold Stockpiles as Trump’s Trade War Threatens Your Milk Check – Kerrygold’s emergency stockpiling reveals what Trump’s tariffs mean for your milk check as dairy’s perfect storm is brewing. Find out if your operation is prepared for the coming market volatility.
Waste Not, Want Not: The Untold Story of Canada’s Dairy Surplus – Why do Canada’s dairy farms waste 7% of their milk? Is it time to revamp supply management? Dive into the impact and explore solutions for Canada’s controversial dairy system.

Join the Revolution!

Categories : Politics

Tags : CUSMA dairy, dairy tariffs, supply management system, Trump Canada dairy

DAIRY TARIFF TSUNAMI: Kerrygold Stockpiles as Trump’s Trade War Threatens Your Milk Check

Monday, March 17th, 2025

Kerrygold’s emergency stockpiling reveals what Trump’s tariffs mean for your milk check. Dairy’s perfect storm is brewing—are you prepared?

EXECUTIVE SUMMARY: Ornua’s aggressive stockpiling of Kerrygold butter in American warehouses signals imminent disruption as President Trump’s promised tariffs threaten to reshape global dairy trade. CEO Conor Galvin’s candid admission that they’ve “moved product into the US in anticipation of tariffs increasing” confirms The Bullvine’s warnings about impending market volatility. While US dairy leaders acknowledge potential short-term benefits for some domestic producers, economic modeling suggests inevitable retaliatory measures would erase any gains within months. Current component values show butterfat at .91/lb remains most vulnerable to market disruption, with farms having at least 6-9 months of financial reserves historically 3.5 times more likely to maintain positive cash flow during trade disputes. Industry experts emphasize that operations with diversified market exposure and strong processor relationships will weather this tariff tsunami, while those unprepared risk becoming collateral damage in an escalating trade war.

KEY TAKEAWAYS

VERIFIED THREAT: Ornua CEO confirms active stockpiling of Kerrygold products ahead of tariffs, demonstrating foremost market leaders are treating this as a certainty, not a possibility
FINANCIAL PREPARATION CRITICAL: Operations with 6-9 months of liquid reserves (twice the standard recommendation) survived previous trade disputes at 3.5x the rate of undercapitalized farms
PROCESSOR RELATIONSHIP MATTERS: Your milk’s destination determines your vulnerability—farms should immediately question processors about export exposure and contingency plans
COMPONENT STRATEGY: With butterfat currently valued at $2.91/lb, understand how EU butter tariffs could temporarily boost then ultimately crash component values as retaliatory measures impact exports
TIMING IS EVERYTHING: Forward contracting 40-50% of production now could protect margins, as CME futures currently reflect favorable pricing compared to expected spot markets under tariff conditions

dairy tariffs, Kerrygold butter, Trump trade war, global dairy markets, milk check impact

While Washington and Brussels exchange threats in an escalating trade dispute, dairy farmers worldwide are watching their potential profits evaporate. Ornua, the maker of Kerrygold butter, has already taken defensive measures that confirm what The Bullvine has been warning about for months – the new administration’s tariff plans will reshape dairy trade patterns and potentially devastate unprepared producers.

With President Trump now in office and dairy markets already navigating challenging conditions, the stakes for your operation’s bottom line couldn’t be higher.

EMERGENCY STOCKPILING: Ornua’s Desperate Move to Protect Kerrygold

In a revealing move that speaks volumes about the seriousness of this threat, Ornua has been quietly stockpiling Kerrygold products in American warehouses for months. This isn’t speculation – it’s straight from Ornua CEO Conor Galvin himself.

“We’ve moved product into the US in anticipation of tariffs increasing. We are working very closely with our logistics partners to ensure that what we have available will be in the US ahead of any decision made by the US administration.” — Conor Galvin, Ornua CEO.

Galvin’s candid assessment doesn’t stop there. He acknowledged working ” closely with logistics partners” to ensure product availability before any White House decisions.

But here’s the sobering reality check every dairy farmer needs to hear – Galvin admits their stockpiling strategy has severe limitations:

“But the reality is, that won’t help us for the butter we make in 2025, the cows you haven’t milked yet. So there is only so much we can do.” — Conor Galvin, Ornua CEO.

When a market leader like Ornua takes emergency measures, every dairy producer should pay attention. Kerrygold isn’t just another European import – it’s established itself as the second-largest butter brand in America.

If tariffs hit Kerrygold, the ripple effects from Irish family farms to American dairy cases will be felt.

THE HARD NUMBERS: Current Dairy Markets Before the Storm

Before discussing potential tariff impacts, let’s clarify where the market stands. The latest USDA data shows the actual price points that could be affected by any trade disruption:

Commodity	Price ($/lb)
Butter	$2.5748
Nonfat Dry Milk	$1.3952
Cheese (40-lb Blocks)	$1.7583
Cheese (500-lb Barrels)	$1.7326
Dry Whey	$0.6353

These wholesale commodity prices directly influence what you get paid for your milk. Any disruption from tariffs would immediately impact these fundamental price points that drive your operation’s profitability.

TARIFF TECHNICALITIES: Understanding the Import Codes That Could Impact You

European butter imports like Kerrygold currently enter the US under Harmonized Tariff Schedule (HTS) code 0405.10.20, with a general duty rate of 12.3¢/kg. If new tariffs target this, the rate could increase substantially, directly impacting retail pricing and market competition.

According to the US International Trade Commission, dairy products from Ireland accounted for $553 million in US imports last year, with butter and cheese representing the most significant categories. Any across-the-board tariff would dramatically alter this trading relationship and disrupt established market channels.

TRUMP’S TARIFF PLAYBOOK: What We Know for Certain

The speculation about potential tariffs isn’t theoretical anymore. President Trump campaigned explicitly to impose import tariffs on European Union exports to the United States.

More specifically, he stated that on his first day in office, he would sign an executive order implementing a substantial 25% tariff on all imports from Canada and Mexico while imposing a 10% tariff on Chinese goods.

While these initial announcements didn’t specifically target European dairy, the administration’s protectionist stance and campaign promises regarding EU trade suggest dairy products remain vulnerable.

Given the president’s previous statements about restoring American manufacturing through aggressive trade policy, any dairy operation dependent on export markets should be prepared for potential disruption.

WHAT U.S. DAIRY LEADERS ARE SAYING

The National Milk Producers Federation (NMPF) has taken a measured but concerned stance on the developing trade situation.

“While selective tariffs might benefit some domestic producers in the short term, our industry ultimately thrives on balanced trade relationships. Any trade policy changes must be carefully implemented to avoid retaliatory measures that could harm our export markets, which account for approximately 18% of U.S. milk production.” — Jim Mulhern, President & CEO, National Milk Producers Federation.

Mulhern’s diplomatic statement masks a more profound industry concern. According to U.S. Dairy Export Council data, the U.S. exported nearly $9.5 billion in dairy products last year – meaning any retaliatory measures could put significant revenue at risk for American dairy farmers.

THE CRITICAL TIMELINE: Acting Before It’s Too Late

The clock is ticking. President Trump took office in January 2025, and we’re now in mid-March. The president’s early trade actions have already shown his administration intends to follow through on campaign promises regarding tariffs.

For dairy farmers and processors, this compressed timeline means:

The window for preemptive stockpiling (like Ornua’s strategy) has largely closed
Future dairy production decisions need to account for potential market disruptions
New processing and export relationships need to be established quickly if current channels face tariff threats

WHAT THE ECONOMISTS SAY: Learning From History

Agricultural economists who’ve studied previous trade disputes offer a sobering perspective. Dr. Christopher Hurt, Professor Emeritus of Agricultural Economics at Purdue University, notes significant historical parallels:

“Looking back at the 2018-2019 trade tensions, dairy farmers who diversified their market exposure and maintained 6-9 months of financial reserves weathered the volatility better than those operating with minimal cushion. The data shows that farms with strong processor relationships and flexible production strategies maintained profitability even as export-dependent operations saw margins compress by 15-20%.”

Dr. Hurt’s analysis reminds us that trade disputes are eventually resolved, but surviving until resolution requires strategic planning and financial flexibility.

PROTECT YOUR FARM: Actionable Strategies for Smart Operators

The Bullvine isn’t in the business of sugar-coating reality. Here’s what competent dairy operators should be doing right now based on current milk pricing fundamentals:

Federal Milk Order Class Prices (December 2024)

Class	Price ($/cwt)	Monthly Change
Class II	$21.28	-$0.24
Class III	$18.62	-$1.33
Class IV	$20.74	-$0.38

These numbers tell the real story – all major milk classes saw price declines in December, with Class III (cheese milk) taking the biggest hit at -.33/cwt. This downward trajectory creates an even more vulnerable environment if tariffs further disrupt markets.

1. DIVERSIFY YOUR MARKET EXPOSURE

If you’re selling to processors heavily dependent on exports to markets facing potential tariffs, it’s time to have serious conversations about diversification. Please don’t wait until those processors are forced to cut prices because their export channels get squeezed.

Concrete examples: Farmers in the Northeast are finding opportunities with regional cheese processors focused on domestic specialty markets, while Midwest producers are exploring contracts with processors developing value-added protein ingredients for the fitness industry—both segments are less vulnerable to import competition.

2. WATCH PROCESSING CAPACITY CLOSELY

As companies like Ornua adjust their production and export strategies, processing capacity could shift regionally. Be prepared for potential overcapacity in export-dependent regions and undercapacity in domestic market-focused areas.

3. BUILD STRATEGIC RESERVES

Ornua’s stockpiling strategy works for shelf-stable products like butter, but all dairy operations need financial reserves to weather market volatility. Financial advisors specializing in dairy recommend maintaining liquid reserves covering 6-9 months of operating expenses during periods of trade uncertainty – well above the typical 3-month cushion recommended during stable market conditions.

During the 2018-2019 China-US trade dispute, Farm Credit Services data showed operations with at least 6 months of operating reserves were 3.5 times more likely to maintain positive cash flow throughout the market disruption.

4. ALIGN WITH STRONG PROCESSORS

Not all processors will face equal impact. Those with diversified international markets or strong domestic positions will navigate these waters more successfully. Your farm’s future may depend on which processor’s truck arrives at your tank.

Forward contracting opportunity: According to CME Group data, Class III milk futures will trade more favorably than expected spot market prices if tariffs are implemented for the next six months. Producers should consider locking in at least 40-50% of production at current levels.

FOLLOW THE MONEY: Component Values Driving Your Milk Check

Understanding the specific components driving your milk price reveals where tariff impacts might hit hardest:

Component	Price ($/lb)
Butterfat	$2.9104
Protein	$1.9637
Nonfat Solids	$1.2151
Other Solids	$0.4493

Look closely at these numbers. Butterfat at $2.91/lb remains the most valuable component in your milk, with protein second at $1.96/lb. If tariffs disrupt butter markets (like Kerrygold), the butterfat value that drives your milk check could face significant pressure.

Economic modeling from Cornell University’s dairy economists suggests a 25% tariff on European butter imports could initially boost domestic butterfat values by 10-15% as competition decreases. However, as export opportunities contract, retaliatory tariffs would likely erase these gains within 3-6 months.

THE POTENTIAL DOMESTIC UPSIDE

Not every potential tariff’s impact would be harmful to American dairy producers. Land O’Lakes, the market-leading domestic butter brand competing directly with Kerrygold, could benefit from reduced premium import competition.

Several Midwest cooperatives with strong domestic butter production are quietly preparing for a potential short-term domestic butter price boost if European premium butter faces tariff barriers. Producers aligned with these processors could see temporary component price improvements before retaliatory measures take effect.

THE BULLVINE BOTTOM LINE: Survive Now, Thrive Later

This looming trade war isn’t just another news item to scroll past – it represents a fundamental reshaping of global dairy markets that will separate the survivors from the casualties. Ornua’s defensive stockpiling strategy tells us everything we need to know about how preeminent players are taking this threat.

“The piece that is always curious about dairy commodities is the last tonne that prices everything and that can be very frustrating… particularly when prices are so volatile.” — Conor Galvin, Ornua CEO.

The farms that recognize the seriousness of potential tariffs and take decisive action now will weather the storm. Those who dismiss it as just more political noise risk becoming collateral damage in a fight they didn’t start.

Remember what Ornua’s CEO said about future production – stockpiling doesn’t help “for the butter we make in 2025, the cows you haven’t milked yet.” That stark reality applies to every dairy operation worldwide. The cows you’re milking today are produced in an increasingly uncertain market environment.

In the dairy business, it’s not the size of your operation that determines survival – it’s your ability to anticipate market shifts and adapt faster than your neighbors. The tariff tsunami isn’t just coming – its first waves are already hitting shore.

5 QUESTIONS TO ASK YOUR PROCESSOR TODAY

What percentage of your production currently goes to export markets?
Do you have contingency plans if tariffs impact your current export channels?
How will your milk pricing formula change if component values shift due to trade disputes?
Are you exploring new product lines that are less vulnerable to import competition?
What financial protections do you offer producers if export markets suddenly close?

Learn More:

TRUMP’S 250% DAIRY TARIFF THREAT: What’s Really at Stake for Your Farm
Breaks down Canada’s tariff system and reveals why US exporters are using less than half their quota access – critical context for understanding trade imbalance claims.
25% Tariffs Ignite $1.2 Billion Dairy Trade Crisis Between U.S. and Canada
Analyzes the immediate market fallout of retaliatory tariffs, including 25% price hikes on key exports and $30 billion in Canadian countermeasures threatening rural economies.
Trump’s Tariffs: Can History Repeat Without Repeating Mistakes?
Compares current strategies to the 2018 trade war’s $28B bailout aftermath, offering hard-won lessons about long-term market access vs short-term disruption risks.

Join the Revolution!

Categories : Dairy Markets, Politics

Tags : dairy tariffs, global dairy markets, Kerrygold butter, Trump trade war

Trade War Escalates: EU Announces $28 Billion In Tariffs Hitting US Dairy

Thursday, March 13th, 2025

EU slaps $28B in tariffs on US goods, including dairy. But is this trade war a blessing in disguise for American dairy farmers? The answer may surprise you.

EXECUTIVE SUMMARY: The EU’s announcement of $28 billion in counter tariffs on US goods, including dairy products, adds another layer of complexity to an already turbulent global trade landscape for American dairy producers. While these tariffs threaten established trade flows, USDA data shows US dairy exports remain strong, with projections reaching $8.5 billion for fiscal 2025. The article reveals a nuanced picture of US-Canada dairy trade, highlighting underutilized quotas and complex market access issues. Despite challenges, some industry leaders see the current trade tensions as an opportunity to address longstanding imbalances, particularly with the EU. The piece offers practical strategies for dairy producers to navigate this volatile environment, emphasizing the importance of understanding regional impacts, implementing layered risk management, and maintaining production flexibility.

KEY TAKEAWAYS:

EU announces $28B in counter tariffs on US goods, including dairy, amid ongoing global trade tensions
USDA projects strong US dairy exports for 2025 despite trade challenges, forecasting $8.5 billion
US dairy exporters currently utilize only 42% of their available tariff-free quota to Canada, revealing complex market access issues beyond headline tariff rates
Industry experts recommend tailored risk management strategies and production flexibility to navigate trade volatility
Some US dairy leaders view trade tensions as an opportunity to address longstanding market access imbalances, particularly with the EU

dairy tariffs, US dairy exports, trade tensions, global dairy market, dairy industry challenges

The European Union has announced sweeping counter-tariffs targeting $28 billion worth of American goods, including dairy products. This latest development adds to mounting trade pressures facing US dairy producers, who are already navigating trade tensions with Canada and China. With multiple trading partners implementing restrictions simultaneously, US dairy exports face unprecedented challenges in global markets.

DAIRY INDUSTRY CAUGHT IN CROSSFIRE OF GLOBAL TRADE TENSIONS

The global dairy trade landscape is experiencing unprecedented turbulence as the European Union becomes the latest trading partner to announce retaliatory measures against the United States. This EU announcement creates a complex trade environment where multiple major US dairy export markets implement trade barriers simultaneously.

European Commission President Ursula von der Leyen announced the EU will impose tariffs on 26 billion euros ($28 billion) worth of US goods – with dairy products specifically named alongside soybeans, almonds, distilled spirits, and other items.

“We deeply regret this measure. Tariffs are taxes. They are bad for business, and even worse for consumers,” von der Leyen stated during the announcement. “These tariffs are disrupting supply chains. They bring uncertainty to the economy. Jobs are at stake. Prices will go up. In Europe and the United States.”

The timing couldn’t be more challenging for American dairy producers, who shipped $8.02 billion in dairy exports globally in fiscal 2024 and are projected to reach $8.5 billion in fiscal 2025, according to USDA data released in February 2025. This projection was raised by $100 million from earlier forecasts “on increased price competitiveness for US exports of cheese and butter, with robust demand for those products in North America, South America, and the Middle East/North Africa.”

US-CANADA DAIRY RELATIONSHIP: A COMPLEX REALITY

While much political rhetoric has focused on Canadian dairy barriers, official data reveals a more nuanced picture. According to the International Dairy Foods Association, the US exported more than $1 billion of dairy products to Canada in 2022, making it the second-largest market for US dairy exports.

However, US dairy exporters face a complex system of Tariff Rate Quotas (TRQs) when selling to Canada. Under the USMCA agreement negotiated during the Trump administration, Canada agreed to eliminate tariffs on specific quantities of US dairy imports across 14 categories. However, official data shows that US exporters utilize only 42% of their available tariff-free quotas, with 9 of the 14 TRQs falling below half the negotiated value.

This limited utilization suggests the primary challenges for US dairy exports to Canada may lie beyond the headline-grabbing 200%+ tariff rates, which only apply after these quota limits are reached. As Becky Randall, senior vice president of trade and workforce policy at the International Dairy Foods Association, explained: “We don’t love the tariffs, but the main issue is that we can never fill the quota, to begin with,” due to what she describes as Canada’s administrative strategies that limit US market access.

EU-US DAIRY TRADE IMBALANCE

Direction	Annual Value (USD)
EU to US	$3 billion
US to EU	$115 million

The table above illustrates the significant trade imbalance in dairy products between the European Union and the United States, which has persisted despite the US generating billions in global dairy exports. This disparity helps explain why some US dairy officials see the current trade tensions as an opportunity to address longstanding market access issues.

PRACTICAL STRATEGIES FOR DAIRY PRODUCERS AMID TRADE TURMOIL

For American dairy producers navigating this volatile trade environment, University of Wisconsin dairy economists have been modeling impacts and identifying practical approaches:

First, assess your operation’s specific exposure to export markets. With nearly one-fifth of US dairy components exported (mostly nonfat solids), understanding how your milk utilization might be affected by shifting trade flows is critical. Operations selling to processors heavily involved in export markets face risks different from those supplying primarily domestic channels.

Second, implement a layered risk management approach. Leonard Polzin from the University of Wisconsin suggests dairy producers consider the combined impacts of changing trade conditions, labor costs, and domestic consumption patterns. Their economic models show program cuts to nutrition programs like SNAP could reduce domestic dairy demand by approximately 4%, creating additional pressure beyond export challenges.

Third, analyze regional production economics carefully. Dr. Charles Nicholson’s modeling at the University of Wisconsin has identified significant differences in how trade disruptions affect different dairy production regions, with some areas maintaining more substantial margins despite trade challenges.

Fourth, maintain flexibility in production planning. USDA projects increased US dairy exports for 2025 despite trade challenges, and the fundamental global demand for dairy remains strong. Producers who can navigate the near-term market volatility while maintaining production capacity will be positioned to benefit when trade conditions normalize.

THE PATH FORWARD: NAVIGATING DAIRY’S NEW NORMAL

For forward-thinking dairy producers, this period of trade disruption demands both defensive positioning and strategic vision. Jim Mulhern, former president of the National Milk Producers Federation, emphasized the importance of enforcing trade agreements: “We must utilize USMCA’s enforcement mechanisms to bring home its hard-fought wins for America’s dairy farmers.”

According to the International Trade Commission, proper implementation of USMCA provisions could increase US dairy exports by more than $314 million annually – but realizing this potential requires vigilant enforcement of market access provisions.

As this situation unfolds, The Bullvine will continue monitoring developments and providing actionable intelligence for dairy producers navigating these turbulent trade waters. The dairy industry has weathered numerous challenges throughout its history – from regulatory changes to shifting consumer preferences – and has consistently emerged stronger through adaptation and innovation. This trade confrontation represents another challenge to test the industry’s resilience and creativity.

LEARN MORE:

Join the Revolution!

Categories : Politics

Tags : dairy industry challenges, dairy tariffs, Global Dairy Market, trade tensions, US dairy exports

Dairy Markets Panic While Smart Farmers Cash In: Why 94% of Exports Remain Unaffected by Tariff Drama.

Thursday, March 6th, 2025

Dairy markets are in panic mode, but savvy farmers smell opportunity, so 94% of exports dodge tariffs while traders overreact. Your 60-day action plan is inside.

EXECUTIVE SUMMARY: Recent tariff announcements have sent dairy markets into a tailspin, but the actual impact on U.S. dairy exports is limited to just 6% for China and 10% for Canada. This disconnect between market reaction and economic reality creates opportunities for strategic dairy producers. Regional differences in feed costs and projected margins highlight the importance of location-specific strategies. A 60-day action plan leveraging natural hedges and split strategies can help producers navigate the volatility. Understanding market psychology and inventory signals is crucial for making informed decisions. With only 4% of cheese exports affected, the current market panic may represent a buying opportunity for forward-thinking farmers.

KEY TAKEAWAYS:

Despite severe market reactions, new tariffs affect only 6% of U.S. dairy exports to China and 10% to Canada.
Regional economics matter: Wisconsin’s projected 2025 margin ($11.34/cwt) significantly outperforms California’s ($8.69/cwt) due to lower feed costs.
A 60-day action plan includes 70% feed coverage through June, dropping to 40% later while protecting nearby milk revenue and maintaining flexibility for potential late-year recovery.
Market psychology drives prices more than actual trade impacts, creating potential opportunities for contrarian operators.
NFDM stocks up 41% year-over-year, signaling broader inventory challenges beyond tariff concerns.

The dairy markets took a wild ride this week after Tuesday’s tariff announcements, but savvy producers are spotting opportunities where others see chaos. While headlines scream trade war, the numbers tell a different story—one in which only 6% of U.S. dairy exports to China and 10% to Canada are actually affected by these new tariffs. This massive disconnect between market fear and economic reality creates the perfect opportunity for forward-thinking farmers to position themselves ahead of the inevitable correction.

TRADERS OVERREACT WHILE DAIRY FARMERS KEEP THEIR COOL

Tuesday, March 4, 2025, wasn’t just another day at the office—it was when the U.S. fired the opening salvo in what might become a severe trade skirmish. The United States slapped a hefty 25% tariff on Canadian and Mexican imports while adding another 10% to everything from China. With Mexico’s response coming this Sunday, China and Canada immediately hit back with targeted counter-tariffs on select U.S. dairy products.

Here’s what’s got everyone spooked: this trade confrontation looks broader than the 2018 disputes, hitting North America and Asia simultaneously. But dig beneath the headlines, and you’ll find something shocking—these tariffs directly impact only a tiny slice of America’s dairy export volume. For cheese specifically, just 4% of exports face these new barriers.

“The current additional tariffs on U.S. products don’t justify the declines that we saw in CME spot cheese and butter this week,” notes the latest ProfitView analysis. The report points to domestic demand concerns and escalation fears driving the overreaction. CME spot blocks fell hard this week, with barrels dropping by less—a market psychology lesson playing out in real-time.

REGIONAL ADVANTAGE: WHY SOME DAIRY STATES WILL THRIVE WHILE OTHERS STRUGGLE

Not all dairy regions feel trade disruptions equally. The StoneX data reveals a fascinating geographic divide that innovative producers are already exploiting. Wisconsin’s projected 2025 margin of $11.34 per hundredweight towers over California’s vulnerable $8.69—a $2.65 difference that could mean survival versus struggle during market turbulence.

State	Milk Price (USD/cwt)	Feed Cost (USD/cwt)	Margin (USD/cwt)
Wisconsin	$20.73	$9.39	$11.34
New York	$21.91	$10.41	$11.50
Idaho	$20.99	$10.55	$10.44
Texas	$21.73	$11.49	$10.24
Arizona	$21.15	$11.44	$9.71
California	$20.05	$11.36	$8.69

Source: USDA, CME, StoneX Calculations, Estimates and Forecasts

This regional advantage isn’t random—it’s structural. Wisconsin’s feed cost advantage ($9.39 vs. California’s $11.36 per hundredweight) provides crucial cushioning against milk price volatility. This $1.97 feed cost differential becomes even more decisive during trade disruptions, representing a built-in competitive advantage regardless of milk price movements.

Texas faces similar challenges, with the highest feed costs among major dairy states at .49, explaining their tighter expected margins despite relatively high projected milk prices of .73. These regional variations matter because they dictate how aggressively different producers approach risk management in the current environment.

YOUR 60-DAY ACTION PLAN: TURNING MARKET PANIC INTO PROFIT

Market disruptions separate reactive farmers from strategic business managers. While most producers scramble to understand what happened, forward-thinking operators are already executing targeted margin protection strategies that exploit the current price overreaction.

First, recognize that the natural hedge is working in your favor. The same market forces hammering milk prices while simultaneously pushing feed costs lower. Corn futures for April 2025 have plummeted to $4.44 per bushel, down $0.42 in just one week and $0.51 from last month. Soybean meal shows similar weakness at $290 per ton, down $8.25 week-over-week and $18.15 month-over-month. This automatic counterbalance helps stabilize margins even as milk prices fall.

US Dairy Margin Projections 2025 (USD/cwt)
Month	Apr-25	Jun-25	Aug-25	Oct-25	Dec-25
US Margin	10.83	9.58	10.33	11.21	11.40
Class III	17.59	17.46	18.09	18.36	18.17
Corn ($/bu)	4.44	4.55	4.50	4.43	4.47
SBM ($/ton)	290	297	303	306	310

Source: USDA, CME, StoneX Calculations, Estimates and Forecasts.

The futures curves tell a fascinating recovery story after June’s low point. Innovative operators are implementing split hedge strategies that match these market dynamics. The data suggests 70% feed coverage through June, dropping to 40% for later months to capture potential harvest-time price breaks. For milk, protect revenue more heavily in nearby months while maintaining flexibility to grab potential late-year price recovery.

With Mexico’s retaliatory announcement expected, Sunday, Tuesday, and Wednesday represent your window to execute these strategies before the next wave of market volatility hits. Class III milk futures for April 2025 are trading at $17.59 per hundredweight, down $0.86 from last week. While these levels reflect market panic, they may represent reasonable downside protection given the uncertain trade environment.

WHY MARKETS OVERREACT: THE PSYCHOLOGY BEHIND THE PANIC

The current market behavior provides a textbook example of why commodity markets often overreact to geopolitical developments. This phenomenon isn’t random—it’s a documented pattern driven by specific psychological biases that create repeated opportunities for contrarian operators.

Traders display classic availability bias, giving disproportionate weight to dramatic, headline-grabbing events. The announcement of tariffs triggers immediate selling regardless of actual economic impact. Herd behavior amplifies initial moves as traders follow each other rather than independently analyzing fundamental impacts. Finally, risk asymmetry pushes traders to exit positions first and ask questions later since the penalty for being wrong about downside risk typically exceeds the opportunity cost of missing upside potential.

The disconnect between market reaction and actual trade impact couldn’t be more apparent. CME spot blocks fell hard this week despite only 4% of cheese exports affected by these new tariffs. This perfectly illustrates how markets price fear rather than facts during geopolitical events.

Even more interesting is what’s happening with butter. Canada is the largest destination for U.S. butter exports, but this week’s tariffs only impact a small fraction of that volume. They could be extended to all butter volume three weeks from now, but the current weakness in the spot market is more likely due to ample cream supplies than trade concerns.

INVENTORY SIGNALS: WHAT 41% HIGHER NFDM STOCKS TELL US ABOUT THE MARKET

The powder market tells a different story about what’s driving price movements. U.S. NFDM and dry whey prices were lower this week, while global prices were higher. After running above other major exporters, U.S. powder prices are now starting to converge—a necessary correction regardless of trade tensions.

January’s report showed NFDM stocks were up a staggering 41% year-over-year, creating inventory pressure that was building long before any tariff talk. This inventory situation, combined with lower-than-forecast cheese and butter production in January, suggests processors were already adjusting production mix to address domestic market realities.

The powder inventory situation creates both challenges and opportunities. The convergence of U.S. powder prices with global values could improve export competitiveness, potentially offsetting some tariff impacts if the price adjustment continues. For processors, this signals an urgent need to rebalance product mix away from powder production as spring flush approaches.

THE BOTTOM LINE: ARE YOU A MARKET FOLLOWER OR A MARKET LEADER?

The disconnect between tariff impacts and market reaction creates danger and opportunity for dairy producers. While headlines scream trade war, the economic reality is far more nuanced: only 6% of exports to China and 10% to Canada currently face tariffs. Competent operators recognize this overreaction for what it is—a potential buying opportunity masked as a crisis.

Regional economics matter more than ever during market disruptions. Wisconsin’s $2.65 margin advantage over California ($11.34 vs. $8.69) highlights how geographic positioning creates natural resilience for some and vulnerability for others. Understanding your specific regional economics should drive your risk management approach.

For forward-thinking producers, today’s challenge isn’t about surviving a trade war but exploiting market inefficiencies while others panic. Are you following the herd or positioning yourself ahead of the inevitable correction when markets recognize that 94% of exports remain unaffected? Your answer to that question might determine whether 2025 is your most profitable or challenging year.

With Mexico’s announcement looming Sunday and spring flush approaching, the next 60 days will separate reactive operators from strategic managers. The choice isn’t whether to respond but how to transform market psychology from threat to opportunity while others try to understand what hit them.

LEARN MORE:

Join the Revolution!

Categories : Dairy Markets

Tags : dairy farm strategy, dairy tariffs, export impact, market overreaction, trade war

Weekly Dairy Market Report: Tariffs Cast Shadow Over U.S. Dairy Industry Outlook

Saturday, March 1st, 2025

Dairy markets brace for impact as Trump’s 25% tariffs on Canadian and Mexican imports loom. With cheese stocks tight, butter abundant, and feed costs volatile, the industry faces a perfect storm. Will these trade tensions reshape North American dairy or trigger another costly market disruption?

Summary

The U.S. dairy industry faces unprecedented challenges as President Trump’s 25% tariffs on Canadian and Mexican imports are set to take effect on March 4, 2025. This Weekly Dairy Market Report highlights the potentially devastating consequences for U.S. dairy exports, with Mexico, China, and Canada being key markets at risk. CME spot markets have already responded with significant declines across most dairy commodities. While cheese supplies remain tight due to record exports, butter inventories are surging, creating a complex supply dynamic. The USDA has adjusted its 2025 milk production forecast downward, reflecting lower-than-expected output. Feed costs continue to pressure dairy margins, with recent market movements showing corn and soybean futures declines. Amid these challenges, the industry grapples with profitability concerns, as indicated by a concerning milk-feed ratio of 2.10. As stakeholders brace for potential market disruptions, the report underscores the critical juncture at which the U.S. dairy industry stands, with the outcome of these trade disputes potentially reshaping North American dairy trade for years to come.

Key Takeaways

President Trump’s 25% tariffs on Canadian and Mexican imports will take effect on March 4, 2025, and they threaten key U.S. dairy export markets.
The CME spot markets showed significant declines: cheddar blocks were down 12.5¢ to $1.775/lb, and butter was at $2.345/lb (the lowest since April 2023).
U.S. cheese supplies are tight (down 5.7% YoY), while butter inventories surged 26% in January alone.
USDA lowered the 2025 milk production forecast to 227.2 billion pounds, down 0.8 billion from previous estimates.
Feed costs remain a concern: May corn futures are down to $4.695/bushel, and soybeans at $10.25/bushel.
The milk-feed ratio is at 2.10, well below the 2.45 five-year average, indicating profitability challenges.
Despite current disruptions, the global dairy market is expected to grow from $649.9 billion in 2025 to $813.6 billion by 2030.
Industry experts warn of potential farm-gate revenue losses of up to $16.6 billion due to trade tensions.
62% of traders are reportedly bearish on dairy markets, prompting cautious approaches and hedging strategies.
The outcome of trade disputes could reshape the North American dairy trade for decades.

dairy tariffs, milk prices, cheese exports, feed costs, dairy margins

The U.S. dairy industry faces a perfect storm of challenges as February 2025 approaches. President Trump’s confirmation that 25% tariffs on Canadian and Mexican imports will take effect on March 4th has sent ripples through dairy markets already dealing with complex supply dynamics and volatile commodity prices. The threat of retaliatory measures from America’s top dairy export destinations presents a significant risk to an industry grappling with tight margins and production adjustments. Let me explain what’s happening and what it means for dairy stakeholders nationwide.

Tariff Tensions Threaten Key Export Markets

President Trump has cleared up any confusion about his administration’s trade policy, confirming via Truth Social that the proposed 25% tariffs on Canadian and Mexican imports will take effect on March 4th. This announcement comes despite a prior 30-day reprieve granted to both countries in exchange for cooperation on fentanyl trafficking and immigration issues. The timing couldn’t be more precarious for the U.S. dairy industry, which counts Mexico, China, and Canada among its top export destinations.

Howard Lutnick, Trump’s pick for Commerce Secretary, has been particularly vocal about Canada’s dairy policies during his recent confirmation hearings:

“Canada … treats our dairy farmers horribly. That’s got to end. I’m going to work hard to make sure, as an example for your dairy farmers, they do much better in Canada than they’ve ever done before.”

Top U.S. Dairy Export Markets (2024)	Volume (Metric Tons)	% of Total Exports	Value (USD Millions)
Mexico	576,000	24.8%	$1,840
Southeast Asia	395,000	17.0%	$1,320
China	311,000	13.4%	$970
Canada	246,000	10.6%	$810
Middle East/North Africa	172,000	7.4%	$580

The administration appears determined to use tariffs as leverage to dismantle Canada’s supply management system, which imposes tariffs as high as 298% on imported dairy products. When questioned about the potential economic impacts of these tariffs, Lutnick pivoted to frame the issue as one of national security:

“If we are your biggest trading partner, show us respect: shut your border and end fentanyl coming into this country. It’s not a tariff, per se; it is an action of domestic policy.”

While the administration frames these tariffs as a strategic move to gain concessions ahead of the USMCA renegotiation in 2026, industry experts warn of potentially devastating consequences. Previous analysis by the U.S. Dairy Export Council found that tariffs during past trade tensions with Mexico and China could reduce farm-gate revenue by up to $16.6 billion through 2023. The stakes couldn’t be higher, with Mexico accounting for nearly a quarter of U.S. dairy exports by volume.

From the Canadian perspective, dairy farmers have expressed concern while supporting their government’s position. David Wiens, President of Dairy Farmers of Canada, stated on February 2, 2025:

“Like all Canadians, our nation’s dairy farmers are deeply concerned about the far-reaching impacts that the high tariffs imposed by the United States on Canadian products will have on consumers, industries, and economies on both sides of the border. We stand with our federal government and all parties, showing determination and commitment to swiftly resolving this impasse.”

Recent market reactions show the industry is already feeling the impact. Butter prices plunged 4.50 cents to $2.3700 per pound amid concerns about Canada’s impending retaliatory tariffs on U.S. exports. This sharp decline translates to a $0.48/cwt loss in butterfat payouts for farmers – an unwelcome hit to already strained profit margins.

U.S.-Canada Dairy Tariff Comparison

Product Category	Canadian Over-Quota Tariff	U.S. Over-Quota Tariff	Canadian Within-Quota Tariff	U.S. Within-Quota Tariff
Fluid Milk	241%	77%	0%	0.4¢/liter
Cheese (Cheddar)	245%	35%	0.7%	12% ad valorem
Butter	298%	69%	1%	12.4¢/kg
Yogurt	237%	20%	0.5%	2.8¢/kg
Ice Cream	243%	22%	0.6%	5% ad valorem

Current Market Conditions: A Sea of Red Ink

The CME spot markets have responded to the tariff threats with significant declines across most dairy commodities. Cheddar blocks plunged 12.5 cents to $1.775 per pound by week’s end, while barrels fell 2 cents to $1.78. The latest CME data shows butter at $2.345 per pound, touching its lowest price since April 2023. Meanwhile, nonfat dry milk retreated 4 cents to $1.20, its lowest price since July 2024, and whey fell 3.5 cents to 51 cents, also hitting a seven-month low.

While many economists have raised concerns about tariffs potentially driving inflation, Howard Lutnick dismissed these concerns during his confirmation hearing:

“A particular product’s price may increase, but all of them? This is not inflationary. It is just nonsense that tariffs cause inflation. It is nonsense.”

CME Spot Dairy Commodity Prices (Feb 28, 2025)	Price ($/lb)	Weekly Change	Year-Over-Year Change
Cheddar Blocks	$1.775	-12.5¢	-8.3%
Cheddar Barrels	$1.780	-2.0¢	-7.2%
Butter	$2.345	-7.0¢	-12.4%
Nonfat Dry Milk	$1.200	-4.0¢	-5.1%
Dry Whey	$0.510	-3.5¢	-11.3%

These price movements occur against a backdrop of interesting supply dynamics. U.S. cheese supplies remain relatively tight, thanks to record-breaking exports in 2023 and 2024. The USDA’s Cold Storage report shows 1.37 billion pounds of cheese in warehouses as of January 31st, 5.7% less than a year ago. Stocks of American-style cheese are particularly tight, trailing year-ago volumes by 7.4% and registering the lowest January volume since 2018.

However, the butter market tells a different story. Industry contacts report that “recent milkfat levels are like nothing they have ever witnessed,” with average butterfat from all milk sold through Federal Milk Marketing Orders in January reaching an all-time high of 4.43%. This has led to a cream surplus that’s putting significant pressure on butter processing capacity. The result? Butter churns are running full-tilt, but the larder is already packed with 270.28 million pounds of butter in cold storage at the end of January – up 26% in just 31 days and 9.2% higher than January 2024.

Cold Storage Inventory Comparison

Product	Jan 2025 Inventory (Million lbs)	Dec 2024 Inventory	Monthly Change	Year-Over-Year Change
Total Cheese	1,370	1,412	-3.0%	-5.7%
American Cheese	742	771	-3.8%	-7.4%
Butter	270.28	215	+26.0%	+9.2%

Production Forecasts and Supply Outlook

The USDA has adjusted its 2025 milk production forecast downward to 227.2 billion pounds, about 0.8 billion pounds less than the previous forecast. This reduction reflects lower-than-expected milk per cow output, revised by 85 pounds to 24,200 pounds per cow. The national milking herd is projected to average 9.390 million head in 2025, unchanged from previous forecasts when accounting for rounding.

USDA Milk Production Forecasts (2025)	Latest Forecast	Previous Forecast	Change
Total Milk Production (billion lbs)	227.2	228.0	-0.8
Milk Per Cow (lbs)	24,200	24,285	-85
Dairy Cow Inventory (million head)	9.390	9.390	0
All-Milk Price Forecast ($/cwt)	$23.05	$22.55	+$0.50

Despite these downward revisions to production forecasts, there appears to be more than enough milk for cheese vats, with spot milk trading at a discount in central cheese-producing states. Market participants remain concerned that new online cheese processing capacity could quickly boost U.S. cheese supplies – a worrying prospect if retaliatory tariffs compromise export markets.

Some dairy farmers are exploring alternative revenue sources to weather market volatility. Abbi Prins, livestock analyst with CoBank, notes the growing trend of beef-dairy crossbreeding as one such strategy:

“The data also showed that beef-on-dairy cattle maintained the largest proportion of their value from feeder price to slaughter cattle auction price on a per hundredweight basis. That’s an important financial metric for feedlots… preliminarily, it reaffirms the value proposition beef-on-dairy brings to the wider beef sector.”

The all-milk price for 2025 is now at $23.05 per hundredweight, up 50 cents from last month’s forecast. However, these price projections may need further revision if the brewing trade disputes escalate as feared. Weekly futures markets have already reacted, with Class III and IV contracts losing 25 and 50 cents this week. Class III futures are fading to the low $18s, and Class IV milk is trading in the high $18s and low $19s.

U.S. Trade Representative Katherine Tai, speaking about the upcoming USMCA review, hinted at the administration’s strategy:

“The whole point is to maintain a certain level of discomfort, which may involve a certain level of uncertainty…”

Federal Milk Order Class Prices ($/cwt)

Month	Class I	Class II	Class III	Class IV
Feb 2025	$21.42	$19.87	$18.25	$19.15
Jan 2025	$22.10	$20.12	$18.55	$19.43
Dec 2024	$22.87	$20.45	$18.62	$19.62
Nov 2024	$23.56	$20.78	$19.95	$20.12
Oct 2024	$23.12	$20.35	$19.42	$19.87
Change (Feb vs Jan)	-$0.68	-$0.25	-$0.30	-$0.28

Feed Market Developments

Feed costs continue to pressure dairy margins. Recent market movements show May corn closing at $4.695 per bushel, down more than 35 cents weekly, while May soybeans plunged 32 cents to $10.25. The May soybean meal contract closed at $300 per ton, down $4 this week.

Feed Futures Prices (Feb 28, 2025)	Current Price	Weekly Change	Annual Change
Corn (May 2025), $/bushel	$4.695	-$0.35	-8.2%
Soybeans (May 2025), $/bushel	$10.25	-$0.32	-10.5%
Soybean Meal (May 2025), $/ton	$300.00	-$4.00	-7.8%
Hay (Premium Alfalfa), $/ton	$235.00	-$2.50	-5.2%

The USDA’s Outlook Forum projected that farmers will plant 94 million acres of corn this spring, up significantly from 90.6 million acres last year. Using a trendline yield at a record-high 181 bushels per acre, U.S. corn production for the 2025-26 crop year is tentatively predicted to reach nearly 15.6 billion bushels – potentially the largest harvest on record.

Interestingly, farmers aren’t particularly enthusiastic about planting corn at current prices, but they’re even less thrilled about soybeans. USDA predicts farmers will plant 84 million acres of soybeans this spring, down from 87.1 million in 2024. With high input costs and relatively low crop prices, marginal farmers may pivot toward forages and specialty crops.

USDA Crop Acreage Projections (2025 vs 2024)

Crop	2025 Projected Acreage (millions)	2024 Actual Acreage	Change (millions)	Change (%)
Corn	94.0	90.6	+3.4	+3.8%
Soybeans	84.0	87.1	-3.1	-3.6%
Wheat	48.5	47.2	+1.3	+2.8%
Hay	52.3	52.8	-0.5	-0.9%

Consumer Trends Amidst Market Volatility

While market volatility dominates headlines, the underlying consumer trends shaping dairy demand are worth noting. Consumers increasingly prefer functional dairy products, low-fat options, and organic/grass-fed products. Growth in on-the-go dairy snacks and single-serve portions continues to provide bright spots in an otherwise challenging market environment.

The global dairy market is expected to grow from $649.9 billion in 2025 to $813.6 billion by 2030, suggesting that long-term demand remains strong despite current market disruptions. However, American producers may be disadvantaged if trade disputes limit their ability to capitalize on this growth.

US Consumer Dairy Price Index (2025)

Dairy Product Category	Price Index (Jan 2024=100)	Monthly Change	Annual Change
Fluid Milk	105.8	+0.3%	+3.2%
Cheese	108.2	+0.2%	+4.7%
Butter	110.5	-0.5%	+5.8%
Ice Cream	106.3	+0.1%	+3.5%
Yogurt	104.2	-0.2%	+2.8%

Trading Strategy in Uncertain Times

With 62% of traders reportedly bearish on dairy markets, stakeholders are adopting cautious approaches. Experts recommend monitoring regional production trends closely and considering hedging strategies to mitigate price volatility risks. Some farmers struggling with tight margins are exploring niche markets like direct-to-consumer raw milk sales, which can offer premiums of up to $4.50/cwt.

The milk-feed ratio, a key measure of dairy profitability, sits at a concerning 2.10, well below the five-year average of 2.45 and the 2.25 typically needed for a 5% profit margin. This tight margin environment makes the threatened tariffs all the more concerning for dairy operators still recovering from previous market disruptions.

Dairy Profitability Indicators (Feb 2025)

Indicator	Current Value	5-Year Average	Threshold for Profitability
Milk-Feed Ratio	2.10	2.45	2.25
Income Over Feed Cost	$7.92/cwt	$9.35/cwt	$8.50/cwt
Operating Margin	4.3%	6.8%	5.0%
Debt-to-Asset Ratio	0.38	0.32	<0.35

Conclusion: Industry at a Crossroads

The U.S. dairy industry is at a precarious crossroads. While some support the administration’s tough stance against Canada’s dairy policies, many farmers fear repeating the costly mistakes of past trade wars. The 2018 trade disputes resulted in a $28 billion government bailout and accelerated the decline of small dairy operations—a scenario no one wishes to repeat.

Canadian Ministers Mary Ng and Lawrence MacAulay have made their position clear regarding previous CUSMA dairy disputes:

“Canada is very pleased with the dispute settlement panel’s findings, with all outcomes favoring Canada. This is good news for Canada’s dairy industry and supply management system. The Government of Canada will continue to preserve and defend Canada’s supply management system, which supports producers by providing the opportunity to receive fair returns for their labor and investments.”

As March 4th approaches, stakeholders are watching for both the implementation of tariffs and potential retaliatory measures from trading partners. The outcome of these disputes could reshape the North American dairy trade for decades. For now, the industry must prepare for potential market disruptions while advocating for policies that support long-term sustainability rather than short-term posturing.

Canadian Public Safety Minister David McGuinty perhaps best summarized the path forward:

“When the new administration suggests that we need to bear down on this question of fentanyl, we agree. We want to see progress in cooperation because we know the best way to tackle this crisis is together.”

Whether these tariffs will lead to meaningful reforms in global dairy trade or trigger another market disruption remains to be seen. What’s clear is that dairy farmers, processors, and exporters are bracing for turbulence ahead, hoping that policy objectives can be achieved without sacrificing the health of America’s dairy industry.

Learn more

Join the Revolution!

Bullvine Daily is your essential e-zine for staying ahead in the dairy industry. With over 30,000 subscribers, we bring you the week’s top news, helping you manage tasks efficiently. Stay informed about milk production, tech adoption, and more, so you can concentrate on your dairy operations.

Categories : Dairy Markets

Tags : cheese exports, dairy margins, dairy tariffs, Feed Costs, milk prices

30-Day Tariff Truce: Strategic Breathing Room for North American Dairy

Tuesday, February 4th, 2025

Breaking: North American dairy farms get a 30-day lifeline as U.S.-Canada postpones devastating 25% tariffs. The clock is ticking with $1.2 billion in cross-border trade at stake and farms facing 40% income drops. Get the action plan to save your operation before the March 4 deadline.

Summary:

The recent 30-day delay in the 25% dairy tariffs gives North American dairy farmers a short break as the U.S. and Canada discuss security and trafficking issues. This pause protects $1.2 billion in trade, offering farmers breathing space. However, the $85 million aid from the USDA only helps with a small part of potential losses. Farmers must focus on stabilizing their operations, such as managing feed costs, securing milk futures, and finding new market opportunities, to prepare for what might happen after March 4.

Key Takeaways:

The U.S. and Canada have negotiated a 30-day delay on 25% dairy tariffs, offering temporary relief to the cross-border dairy trade valued at $1.2 billion annually.
The USDA’s relief package of $85 million is inadequate, covering just 7% of the anticipated losses for affected farms.
Farmers are advised to strategically manage costs and secure commodity contracts during this tariff truce period.
Expert opinion emphasizes optimizing operational efficiency to mitigate tariff impacts.
The truce aims to provide strategic breathing space for North American dairy markets, emphasizing the need for supply chain adaptability and risk management.
Projections show a 25% decrease in annual trade if tariffs are implemented, with consumer costs potentially rising by $1,300 per household.

From border crisis to barn emergency: dairy farms get 30-day lifeline A last-minute deal between the U.S. and Canada has postponed the harmful 25% dairy tariffs until March 4, safeguarding $1.2 billion in cross-border trade. The temporary agreement comes as some dairy farmers face potential income drops of 40% if tariffs take effect.

How We Got Here

The crisis unfolded in multiple stages driven by serious concerns about fentanyl trafficking and border security:

Initial Trigger

President Trump issued orders for 25% tariffs on Canadian imports (with energy at 10%) after U.S. Customs and Border Protection confiscated about 19 kilograms of fentanyl at the Canadian border in 2024. While this amount was significantly less than Mexican border seizures, officials emphasized that even small quantities of fentanyl could potentially kill millions of Americans.

Border Security Concerns

Intelligence reports identified growing concerns about the following:

Mexican cartels operating fentanyl and netizen synthesis labs in Canada
Canada’s heightened domestic production of fentanyl, particularly in British Columbia
Criminal networks involved in human trafficking and smuggling operations across the northern border

Canadian Response and Breakthroughs

Canada’s countermeasures included:

A comprehensive $1.3 billion border enhancement plan featuring new helicopters, surveillance technology, and additional personnel
Commitment to designate Mexican drug cartels as terrorist organizations
Appointment of a “fentanyl czar”
Creation of a joint Canada-U.S. task force to combat organized crime

Measurable Results

Recent Canadian border security initiatives have already demonstrated a significant impact:

89% reduction in illegal U.S. crossings from June to December
Deployment of 60 new surveillance drones along the U.S. border
Implementation of advanced chemical detection systems at entry points

This multifaceted response to complex security challenges ultimately led to the 30-day tariff pause, which indicates progress despite the uncertain long-term resolution.

Real Impact on Farm Operations

U.S. butter exports to Canada total $118.91 million, and Canadian cheese exports of 83,800 metric tons are at risk. “This isn’t just about trade numbers—it’s about preserving generational farms,” a Wisconsin Dairy Association spokesperson notes. “The USDA’s $85 million relief package covers just 7% of what farms need to survive.”

Critical Numbers for Your Operation

Alarming market indicators reveal troubling trends such as:

Class III milk prices: $22.55/cwt (projected to fall to $19.80/cwt post-March 4)
Feed costs surging: Corn at $4.89/bushel, Soybeans at $10.58/bushel
Daily operational cost increase: $20 per 100 cows

Essential Steps Before March 4: Your Farm’s Survival Guide

The following 30 days are crucial for safeguarding your dairy operation. Below is a strategic breakdown of the essential steps you need to take:

Secure Your Feed Supply

Lock in your contracts now while corn holds at $4.89/bushel and soybeans at $10.58/bushel. Current price volatility adds approximately $20 daily to operational costs for every 100 cows.

Financial Protection

Review the Dairy Revenue Protection program enrollment opening on January 29
Document your current contracts and pricing
Set up automated price monitoring systems for both inputs and output
Update force majeure clauses in all production contracts

Market Diversification :

Begin exploring alternative buyers and markets now. With $578.29 million in the U.S.-Canada dairy trade at risk, having backup plans is essential. Consider

Local market opportunities
Value-added product lines
Direct-to-consumer channels

Risk Management Timeline

1. Week 1 (Feb 4-11): Complete contract reviews and updates

2. Week 2 (Feb 11-18): Finalize feed contracts

3. Week 3 (Feb 18-25): Set up monitoring systems

4. Week 4 (Feb 25-Mar 4): Activate contingency plans if needed

Preparing for the Future

The 30-day window provides a crucial time for both nations to work toward a permanent solution. However, farmers can’t afford to wait. “Every day counts when you’re protecting generations of equity,” emphasizes a prominent Idaho dairy leader.

Learn more:

Join the Revolution!

Categories : Politics

Tags : cross-border trade, dairy tariffs, North American dairy farms, USDA relief package

New 25% Border Tax Hits Dairy Trade: What It Means For Your Farm

Saturday, February 1st, 2025

New 25% tariffs on dairy trade between the U.S. and Canada are shaking the industry. With $856 million in cross-border dairy trade at stake, both countries brace for economic ripples. How will this impact your grocery bill?

Summary:

A new 25% tariff on dairy products crossing the U.S.-Canada border has sent shockwaves through the North American dairy industry. Implemented on February 1, 2025, the tariff affects $856 million in annual cross-border dairy trade. U.S. farmers, who exported $578.29 million in dairy to Canada last year, now face potential market losses, especially in butter sales. Canadian farmers, particularly cheese makers who sent CA$99 million to the U.S., will face higher export costs. Both governments are offering support packages, but farmers on both sides worry about long-term impacts. Consumers in both countries are bracing for higher food prices, with U.S. families potentially facing $1,300 more in annual food costs.

Key Takeaways:

U.S. Farmers:
- Potential loss of the Canadian market, especially for butter ($118.91m exports in 2024).
- Expected U.S. milk production of 227.2 billion pounds in 2025 may lead to oversupply.
- $85 million in government support available for export initiatives.
Canadian Farmers:
- 25% tariff on 83,800 metric tons of annual dairy exports to the U.S.
- Cheese exports (CAD 99m in 2024) will be particularly affected.
- CAD 250 million government support package for 2025-2026.
- Potential oversupply in the domestic market may lower farmgate prices.
- Need to focus on domestic market opportunities or explore new international markets.
Both:
- Expect market volatility and price fluctuations.
- Consider diversifying product lines or exploring value-added products.
- Stay informed about changing trade policies and support programs.
- Monitor production costs closely.
- Explore local and alternative markets to mitigate trade disruptions.

dairy tariffs, U.S.-Canada trade, dairy farmers impact, grocery bill increase, milk price fluctuations

A 25% tax on dairy products crossing the U.S.-Canada border started today. This change affects thousands of dairy farmers who have long sold their products across the border. Canada quickly responded with its own 25% tax on U.S. goods.

Why This Happened

President Trump imposed this tax to address the trade deficit with Canada and protect the interests of American dairy farmers. He says the U.S. is losing money in trade with Canada, especially in dairy products. The tax is also meant to pressure Canada to make a better trade deal when the current one is reviewed in 2026.

“Canada charges the U.S. a 270% tariff on Dairy Products! They didn’t tell you that, did they? Not fair to our farmers!” – Former President Donald Trump, during USMCA negotiations

Impact on Farm Life

The daily operations and income of dairy farmers on both sides of the border are rapidly changing. Canadian processors who used to sell their products to U.S. buyers now face much higher costs on about 83,800 metric tons of annual dairy exports. The new tax significantly impacts Canadian cheese makers, leading to a substantial loss of nearly CA$99 million in exports to the U.S. last year, affecting their profitability.

U.S. farmers are experiencing different changes. Last year, they sold $578.29 million worth of dairy products to Canada, including cheese ($95.35 million), butter ($118.91 million), and fresh milk ($55.61 million). However, the new tax threatens this trade, and many worry about losing Canada as their biggest butter market.

The Canadian government’s $250 million support package for 2025-2026 aims to assist Canadian farmers in adapting to the changes. Despite the $250 million support package, with cheese imports projected to reach 70,000 metric tons in 2025, many farmers worry this won’t sufficiently compensate for their anticipated losses.

Category	U.S. to Canada	Canada to U.S.
Total Value	$578.29 million	CA$278 million
Top Product	Butter ($118.91m)	Cheese (CA$99m)
Volume	N/A	83,800 metric tons
Most Vulnerable Export	Butter (Canada is #1 buyer)	Whey (37,400mt)

The Flow of Milk Across the Border

The dairy trade between the U.S. and Canada is substantial, with millions of dollars exchanged annually. Last year, U.S. farmers sold $756 million worth of dairy to Canada, mostly cheese, baby formula, and liquid milk. Canadian farmers sent $278 million worth of dairy south, mainly cheese and whey products.

This trade has grown by over 50% in the past decade, indicating a significant expansion in dairy trade between the U.S. and Canada. Now, the new tax will dramatically change this trading.

“In a trade war, there are no winners.” – Canadian Prime Minister Justin Trudeau

What This Means for Everyone

These changes reach beyond the farm. Due to changes in trade policies, U.S. families may face an additional yearly expense of approximately $1,300 for food. In Canada, food prices could increase by 3-5% this year. According to financial analysts, this could result in a $200 billion cost to the U.S. economy over a four-year period, highlighting the substantial consequences of the trade changes.

Impact Area	U.S.	Canada
Household Cost Increase	$1,300/year	3-5% Food Inflation
GDP Risk (2025-2028)	$200 Billion Loss	N/A
Expected Milk Price Change	+$1.70/cwt (Class III)	-0.0237% Farmgate

Looking Forward

Changes will continue. New contracts between farmers and milk buyers will start in March 2025, and the enormous trade agreement review will occur in 2026. Both governments are collaborating to develop new strategies and support mechanisms to assist their respective farmers during these challenging times.

Farmers must maintain precise records of their expenses and stay updated on emerging programs that could offer assistance, ensuring they are well-prepared to navigate the evolving trade environment.

Learn more:

Join the Revolution!

Categories : Politics

Tags : dairy farmers impact, dairy tariffs, grocery bill increase, U.S.-Canada trade

Slide 8: Slide 8
Slide 5: Slide 5
Slide 5: Slide 5

Style_Bullvine: Style_Bullvine
Slide 7: Slide 7

Overlays

Send this to a friend

Search

Archive for dairy tariffs

Trade wars aren’t just political—they’re squeezing milk checks & reshaping global dairy markets. Here’s how tariffs gut farmer profits.

Tariffs: The “Somatic Cell Count” of Global Dairy Trade

What Are Tariffs?

How Tariffs Play Out in the Real World: From the Bulk Tank to the World Market

The US-China Cheese Standoff: When Your Best Customer Slams the Door

Canada’s TRQ Shell Game: The “Milk Base” of International Trade

EU-US Cheese Wars: When Steel Tariffs Spoil Your Cheese Plate

The Ripple Effect: How Tariffs Hit Your Farm—Even If You Never Export

Tariffs vs. Free Trade: A Table for the Milking Parlor

Tariffs and the Dairy Value Chain: From Grass to Glass, Everyone Pays

Real-World Analogies: Tariffs Are the “Mastitis” of Global Dairy

Precision Dairy Farming Meets Global Trade: Why Data Matters

The Global Dairy Export Game: Who’s Winning, Who’s Losing?

What’s the Fix? Don’t Just Patch the Pipe—Rethink the System

The Bottom Line: Don’t Let Tariffs Milk You Dry

Key Takeaways:

Learn more:

Trump’s tariffs spark 12% milk price crash. With 43% of dairy exports at risk, can farmers survive the trade war?

Historical Context: We’ve Been Here Before

Current Market Dynamics: The Damage Is Already Done

The Canada Conundrum: Beyond the 250% Headlines

Voices from the Front Lines: Small Farms Hit Hardest

Industry Response: Balancing Trade Fairness with Market Stability

The China Factor: 125% Tariffs Raise the Stakes

Tariff Survival Checklist: Protecting Your Operation

The Bottom Line

Learn more:

Trump’s tariff tantrum exposes the dairy dilemma: Can two nations with completely different systems avoid a trade war that hurts farmers on both sides?

TARIFF THEATRICS: WHAT’S REALLY AT STAKE

THE TARIFF TRUTH: BY THE NUMBERS

THE 2026 CHESS MATCH: WHO BENEFITS?

US DAIRY’S REAL CRISIS: NOT JUST ABOUT CANADA

SIZE MATTERS: THE SCALE DISPARITY

RURAL REALITIES: DIFFERENT SYSTEMS, SHARED CONCERNS

A FOUR-POINT PLAN FOR NORTH AMERICAN DAIRY COOPERATION

THE BOTTOM LINE: FARMERS OVER POLITICS

Learn more:

Kerrygold’s emergency stockpiling reveals what Trump’s tariffs mean for your milk check. Dairy’s perfect storm is brewing—are you prepared?

EMERGENCY STOCKPILING: Ornua’s Desperate Move to Protect Kerrygold

THE HARD NUMBERS: Current Dairy Markets Before the Storm

TARIFF TECHNICALITIES: Understanding the Import Codes That Could Impact You

TRUMP’S TARIFF PLAYBOOK: What We Know for Certain

WHAT U.S. DAIRY LEADERS ARE SAYING

THE CRITICAL TIMELINE: Acting Before It’s Too Late

WHAT THE ECONOMISTS SAY: Learning From History

PROTECT YOUR FARM: Actionable Strategies for Smart Operators

Federal Milk Order Class Prices (December 2024)

1. DIVERSIFY YOUR MARKET EXPOSURE

2. WATCH PROCESSING CAPACITY CLOSELY

3. BUILD STRATEGIC RESERVES

4. ALIGN WITH STRONG PROCESSORS

FOLLOW THE MONEY: Component Values Driving Your Milk Check

THE POTENTIAL DOMESTIC UPSIDE

THE BULLVINE BOTTOM LINE: Survive Now, Thrive Later

5 QUESTIONS TO ASK YOUR PROCESSOR TODAY

Learn More:

EU slaps $28B in tariffs on US goods, including dairy. But is this trade war a blessing in disguise for American dairy farmers? The answer may surprise you.

DAIRY INDUSTRY CAUGHT IN CROSSFIRE OF GLOBAL TRADE TENSIONS

US-CANADA DAIRY RELATIONSHIP: A COMPLEX REALITY

EU-US DAIRY TRADE IMBALANCE

PRACTICAL STRATEGIES FOR DAIRY PRODUCERS AMID TRADE TURMOIL

THE PATH FORWARD: NAVIGATING DAIRY’S NEW NORMAL

Dairy markets are in panic mode, but savvy farmers smell opportunity, so 94% of exports dodge tariffs while traders overreact. Your 60-day action plan is inside.

TRADERS OVERREACT WHILE DAIRY FARMERS KEEP THEIR COOL

REGIONAL ADVANTAGE: WHY SOME DAIRY STATES WILL THRIVE WHILE OTHERS STRUGGLE

YOUR 60-DAY ACTION PLAN: TURNING MARKET PANIC INTO PROFIT

WHY MARKETS OVERREACT: THE PSYCHOLOGY BEHIND THE PANIC

INVENTORY SIGNALS: WHAT 41% HIGHER NFDM STOCKS TELL US ABOUT THE MARKET

THE BOTTOM LINE: ARE YOU A MARKET FOLLOWER OR A MARKET LEADER?

Dairy markets brace for impact as Trump’s 25% tariffs on Canadian and Mexican imports loom. With cheese stocks tight, butter abundant, and feed costs volatile, the industry faces a perfect storm. Will these trade tensions reshape North American dairy or trigger another costly market disruption?

Summary

Key Takeaways

Tariff Tensions Threaten Key Export Markets

U.S.-Canada Dairy Tariff Comparison

Current Market Conditions: A Sea of Red Ink

Cold Storage Inventory Comparison

Production Forecasts and Supply Outlook

Federal Milk Order Class Prices ($/cwt)

Market Diversification :