The impact of tariffs on the global dairy trade is “currently unclear”, according to a new report published this week by Ornua.
The latest Ornua Global Dairy Market Report for March outlined that “history indicates they will have a negative effect, though some commodities will be affected more than others”.
The report noted how dairy demand usually improves in quarter two of the year, but weaker Chinese buying and trade wars may dampen sentiment and demand.
Last year, Ornua confirmed that it was moving additional dairy products into the US market ahead of any possible increase in import tariffs by US President Donald Trump.
Kerrygold, which is produced by the co-op, is seen as a premium product which is currently the number two butter brand in the US.
That trade mission comes against the backdrop of escalating trade tensions between the European Union and the US.
This week, US President Donald Trump said that he will shortly place a 200% tariff on all wines, champagnes and alcoholic products coming out of Europe.
It followed a move by the European Union to impose counter tariffs on €26 billion ($28 billion) worth of US goods from next month.
The focus of the trade mission will be to highlight the investment made by Irish food companies based in America.
The minister will emphasise that around 200,000 Americans are employed across 770 Irish companies in the US during his political meetings. Ornua employs around 800 people in the US.
Ornua
Meanwhile, the Ornua Global Dairy Market Report shows that European milk supply has been “weaker than expected and the scope for volume growth is limited”.
Milk collections across the EU 27 countries were flat in December and fell by about -1.2% in January.
Milk supply in Ireland increased by 9.4% in January, but this was against a very weak base and was lower than forecast.
“Globally, annual growth is unlikely to exceed 0.5%, though milk solids may be stronger.
“European commodity markets weakened in February with high pricing and lower seasonal demand impacting.
“European cheese and powders markets have yet to build momentum, but there are signs of stability. Butter and cream prices firmed.
“While weaker, recent Global Dairy Trade (GDT) results were better than expected with some buyers potentially looking to lower their exposure to US trade,” the report added.
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