Ornua, the largest exporter of Irish dairy products, has said that the decision by the US to impose new tariffs means some buyers are adopting a ‘wait-and-see’ approach.
In its market report for April, the co-op said that the new US tariffs will “disrupt trade and weaken economic growth”.
“After a relatively stable quarter one, this will dampen market sentiment during a period when demand and pricing usually lifts,” it stated.
“The full impact of these tariffs is currently unclear. While some commodities will be affected more than others, tariffs disrupt trade and weaken economic growth and demand.
“Thus, while global milk supply is flat and activity usually improves in quarter two, demand concerns will inevitably affect market sentiment,” the report added.
Trump said all countries that had not retaliated against US tariffs would only face a blanket US tariff of 10% until July.
Under the original announcement, agri-food produce from Ireland would have been impacted by a 20% tariff on exports from the EU.
Ornua
The report also outlined that global milk supply was flat in February and annual growth is
unlikely to exceed +0.5%, though milk solids may be stronger.
Ornua said that European milk supply has been weaker than expected and the scope for volume growth appears limited.
In the European Union, milk flows fell in January (-0.7%) and February (-1.2%) with reports that bluetongue is still affecting output.
“It’s likely volumes will fall in 2025 with both bluetongue and food and mouth disease currently on the radar. Though supply may be better once adjusted for solids,” the report said.
Flows in Ireland lifted by 9.4% in January and are expected to increase again in February.
In the UK, milk flows were strong in quarter four (Q4) and into quarter one (Q1).
In Germany, flows fell by approximately -2.2% in January and -3.2% in February. Collections in France fell by approximately -1.7% in January and -2.6% in February.
Ornua said that output in the Netherlands had been showing signs of stability but dropped off
in January and February.
In the US, collections improved in February and supply is noticeably stronger when adjusted for solids.
The report shows that New Zealand collections in grew again in February supported by favourable weather and a strong milk price.
While flows are improving in Argentina (up 8.5% in the first two months of the year), they are modest historically.
Ornua said that reports suggest flows are contracting in China with low margins impacting.
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