With China already imposing retaliatory tariffs on U.S. dairy, and other country’s potentially to come, dairy exports could suffer.
The U.S. dairy industry relies heavily on exports to keep domestic markets balanced. Last year, U.S. dairy exports accounted for 16.4% of total U.S. milk production, and the dairy industry’s three largest export markets, Mexico, Canada, and China, accounted for more than half of all dairy exports by volume and value.
Mexican tariffs on U.S. dairy imports appear to be off the table for now, but the trade spat is far from over, said Sarina Sharp, analyst with the Daily Dairy Report. Mexico, the largest market for U.S. dairy overall, is also the leading buyer of U.S. nonfat dry milk (NDM) and cheese, accounting for 52.4% and 37.7% of their respective totals in 2024. The country is also the second largest market for butter and milkfat behind Canada. During the 2018-19 trade war that began under President Donald Trump’s first term, dairy product exports to Mexico fell 17.6% between 2018 and 2020, according to USDA export data.
“China has already imposed 10% tariffs on most U.S. dairy products. Tensions are running high between the U.S. and Canada, and conversations about Canada’s treatment of U.S. dairy imports are particularly heated,” Sharp said. “President Trump said he might place 250% tariffs on Canadian dairy products, mirroring above-quota tariffs for U.S. dairy exports to Canada. But members of the Trump administration recognize that administrative tricks to use up zero-tariff quota volumes are the real barrier to greater U.S. dairy exports across our northern border.”
If Canada reciprocates, it could be very painful for the U.S. dairy industry, she said. Last year, the United States exported nearly $1.4 billion worth of dairy products to Canada and purchased only $545,890 in return.
The United States exported nearly 100 million pounds of cheese abroad in January, up 22% from January 2024 but just shy of last spring’s record-shattering volumes. Shipments to Mexico were 0.6% higher than January 2024’s very strong showing.
“The steep drop in U.S. butter prices in October and November attracted new buyers,” Sharp said. “U.S. butter and milkfat exports soared to a 26-month high of 15.74 million pounds, more than doubling January 2024 shipments. Canada bought the lion’s share. Canada and Mexico also imported significant volumes of U.S. cream. While U.S. butter imports retreated from the record-smashing volumes set in fourth-quarter 2024, they were still higher than any January on record.”
U.S. exports of less than 100 million pounds of nonfat dry milk (NDM) and skim milk powder (SMP) in January, were the lowest monthly total in more than five years and 20% less than in January 2024. And finally, U.S. whey powder exports rose 1% to 31.8 million pounds from January 2024.
“The steep drop in U.S. whey prices that occurred early this year could boost whey exports in months to come, but with the trade war at full boil, U.S. dairy exports could get burned,” Sharp noted. “That’s because China accounted for nearly half of U.S. whey exports in January, and the country has since levied a 10% border tax on U.S. dairy imports, effective March 10, making most whey products more expensive to Chinese importers.”
You can now read the most important #news on #eDairyNews #Whatsapp channels!!!
🇺🇸 eDairy News INGLÊS: https://whatsapp.com/channel/0029VaKsjzGDTkJyIN6hcP1K
