Fonterra & Zespri Navigate New US Import Duties, See Continued Growth.
New Zealand’s leading exporters, dairy giant Fonterra and kiwifruit marketer Zespri, are navigating the landscape of new U.S. tariffs imposed by President Donald Trump. Despite the 10% additional tariff on New Zealand products since April, which adds to existing “very significant” dairy product tariffs, both companies view it as a reality of doing business rather than an insurmountable obstacle. The U.S. remains a “critical” top-five market for Fonterra, which was responsible for the majority of New Zealand’s $1.35 billion in dairy exports to the U.S. last year.
Richard Allen, President of Global Ingredients for Fonterra, indicates that while it’s “relatively early days” to assess the full impact, the 10% tariff is expected to be a persistent factor. He noted that the dairy industry frequently contends with various challenges, including supply chain disruptions and geopolitical issues, and these tariffs are simply another element to manage. Fonterra is confident it can continue its growth trajectory in the U.S., emphasizing the enduring importance of this market, provided current conditions remain stable.
For Zespri, the horticulture sector’s largest exporter, the higher U.S. tariffs have been somewhat mitigated by unexpectedly strong growth in American consumer demand this season. CEO Jason Te Brake described this surge in demand as a “pleasant surprise.” In response, Zespri plans to significantly increase its shipments, delivering 13.5 million trays of New Zealand-grown fruit to the U.S. this season, a notable rise from 11.3 million trays in the 2024-2025 season, which generated approximately $280 million in U.S. sales.
Zespri’s confidence in the U.S. market is further evidenced by its decision to launch its recently commercialized RubyRed kiwifruit variety in the U.S. this season. Despite the tariffs, Zespri does not anticipate passing the additional cost directly onto U.S. consumers at this stage. This strategic move, coupled with higher than predicted demand, suggests that some agricultural sectors can absorb or offset the tariff impacts through market responsiveness and strong consumer interest, showcasing resilience in agribusiness trade.
Overall, the sentiment in international food markets regarding the new tariffs appears to have stabilized. Exporters are largely “getting on” with business, having “booked” the likely impacts and adapted their strategies. While the U.S. tariffs posed an initial concern, both Fonterra and Zespri’s experiences highlight the adaptability of major New Zealand exporters in navigating complex global trade environments, underscoring the dynamic nature of international dairy economics and horticulture trade.
Source: NZ Herald: Agribusiness and Trade: How Fonterra and Zespri are navigating US tariffs
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