Despite the initial concerns, some of New Zealand’s largest exporters have yet to feel the full force of these tariffs. Fonterra’s director, Simon Tucker, noted that the 10% tariff on New Zealand exports, which was officially announced on April 5, is unlikely to change in the near future. However, the full impact of these tariffs is being delayed by existing long-term contracts, making it challenging to definitively determine how the costs will be shared between customers and exporters, a critical factor for dairy economics.

The article delves into specific sectors, illustrating the varied responses to the tariffs. For lamb exports, the Lamb Company, a collective owned by three of New Zealand’s largest meat exporters, faces a crucial decision: whether to pass the tariff cost directly onto their customers or absorb the expense themselves. This decision will have significant implications for their profitability and competitiveness in the U.S. market.

In the case of manufacturing beef, New Zealand exporters are experiencing considerable pressure from their American customers to absorb the tariff costs. This indicates a buyer’s market for this particular commodity, where the negotiating power lies with the importers. Conversely, prime beef exporters have found their buyers more willing to share the cost, suggesting a higher value proposition or less elastic demand for premium cuts, creating a nuanced picture for livestock exports.