The military escalation between Israel and Iran—followed by U.S. involvement and an unconfirmed ceasefire—has added pressure to global trade flows. While demand hasn’t shifted significantly, disrupted shipping routes could affect delivery timelines and redirect supply chains, particularly favoring suppliers like New Zealand.

Processors emphasized their preparedness to manage these risks. Fonterra stated that while operations remain unaffected for now, it has contingency plans for potential closures in the Strait of Hormuz. Disruptions in that key corridor could trigger ripple effects in freight logistics, even if immediate dairy supply or demand hasn’t been directly impacted yet.

Market analysts remain cautious but not alarmed. Highground Dairy and Jarden pointed out that although geopolitical shocks usually spook commodity markets, dairy prices have stayed relatively stable, and even slightly favorable for New Zealand given Europe’s shipping constraints.