In the news affecting a dairy's bottom line this first week of March 2025:

Lee karen
Karen Lee
Managing Editor / Progressive Dairy
Karen Lee covers current news and events, and manages the dairy editorial team for the U.S. and C...

Tariffs imposed on U.S. dairy’s top three export markets, then delayed again

As promised a month ago, the U.S. levied new tariffs on March 4 on imports from Canada, Mexico and China. In breaking news on Thursday, March 6, President Donald Trump granted temporary exemptions for Canadian and Mexican goods covered by the North American trade agreement known as USMCA, which includes dairy products.

As the top three importers of U.S. dairy products, these three countries purchased just over half (50.9%) of U.S. dairy exports last year, which is also approximately 9% of the milk produced in the U.S.

U.S. dairy exports topped $8.2 billion in 2024, the industry’s second-highest level ever. Mexico imported $2.47 billion in U.S. dairy products, Canada imported $1.14 billion, and China imported $584 million.

Both China and Canada retaliated early in the week with new tariffs on U.S. exports, including dairy products. Canada has indicated it will continue with its retaliatory measures, despite the temporary exemption, for as long as the threat of tariffs remains in place.

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The temporary exemption is set to expire on April 2, the same date Trump indicated he would enact reciprocal tariffs on foreign nations that have import taxes on U.S. goods.

Last year, Canada ranked fourth in countries selling dairy products to the U.S. The U.S. purchased $546 million of dairy products from Canada in 2024.

Gregg Doud, president and CEO of the National Milk Producers Federation (NMPF), said, “Mexico and Canada are valuable trading partners that American agriculture depends on, and trade with those countries is critical to the well-being of dairy farmers. Let’s focus on getting the concerns ironed out quickly so we can focus on bolstering these critical trade relationships. Then, let’s put those tariff tools to work, driving change with the trading partner that’s brushed off U.S. concerns for far too long – the European Union.”

Low Carbon Fuel Standard regulation updates paused

The California Office of Administrative Law’s (OAL) recently sent notice of its decision to disapprove amendments that were made to the Low Carbon Fuel Standard (LCFS) regulation back in November.

As stated in a notice posted by the California Air Resources Board (CARB), the OAL identified inconsistencies of specific regulatory amendment provisions and incorrect procedure as the basis for disapproval.

CARB staff said they plan to address the concerns raised by OAL and resubmit the LCFS amendments.

In the meantime, CARB will continue to implement the current version of the LCFS regulation, which became effective in July 2020.

Farmer sentiment rises as current conditions improve

Farmer sentiment rose again in February, with a big improvement in farmers’ appraisal of current conditions on their farms, according to the latest Purdue University/CME Group Ag Economy Barometer.

“A sharp crop price recovery in the last several months, which was augmented by expectations for receipt of disaster payments authorized by Congress, combined with strength in the U.S. livestock sector, contributed to producers’ improved appraisal of conditions on their farms and in the U.S. agricultural sector,” said James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture.

The shift in sentiment regarding the current situation on their farms also appeared to encourage more producers to say this is a good time to make large investments in their farm operation. Producers seem optimistic about the future, although they are concerned about the possible passage of a new farm bill, as well as the likelihood of a trade war breaking out that would adversely affect U.S. agricultural exports.

The Ag Economy Barometer provides a monthly snapshot of farmer sentiment regarding the state of the agricultural economy. The survey collects responses from 400 producers whose annual market value of production is equal to or exceeds $500,000. Minimum targets by enterprise are as follows: 53% corn/soybeans, 14% wheat, 3% cotton, 19% beef cattle, 5% dairy and 6% hogs. Latest survey results, released March 4, reflect ag producer outlooks as of Feb. 10-14.

Rabobank: Global dairy market: Modest growth amid trade shifts

According to a recent RaboResearch report, the global dairy market is on track for modest growth in 2025, driven by a steady expansion in supply and rising export demand, despite evolving trade dynamics.

The growth is primarily fueled by production increases in the European Union (EU) and the U.S., with Oceania and South America also contributing. Despite the anticipated growth, the mild increase is expected to maintain market balance without leading to oversupply.

Dairy farmers in most regions are poised to benefit from increased revenue due to rising milk production. New Zealand leads with strong farmer sentiment, supported by Fonterra’s robust NZ$10 per kilogram of milk solid price forecast amid falling interest rates. Healthy margins are also reported in Australia, Brazil, the EU, and the U.S., driven by elevated milk prices and lower feed costs, a trend observed globally this quarter.

“While retail dairy prices experienced deflation in parts of 2024, offering relief after previous inflationary years, we expect higher farmgate milk prices to lead to increased consumer prices in 2025,” explains Lucas Fuess, senior dairy analyst for RaboResearch.

As the world navigates a soft economic landing post-interest rate hikes, significant price increases at retail or dining establishments may face resistance from budget-conscious consumers.

Fuess said China is diverging from global trends with a notable drop in milk production in 2024 following years of expansion. This decline, driven by fewer cows and unexpected reductions in fourth-quarter 2024, has led to a revised 2025 forecast. RaboResearch now estimates production will be down 2.6% from the previous year. Despite lower farmgate milk prices discouraging production, demand is expected to improve, although slowly, with imports anticipated to rise from 2024’s low levels.

GDT index is lower again

The price index of dairy product prices sold on the Global Dairy Trade (GDT) platform is down slightly (0.5%) for the second consecutive sale in the auction held March 4.

Compared to the previous auction, prices for individual product categories were mixed. Lactose and mozzarella had big gains, up 14% and 7.9%, respectively. Butter was up 2.7%, cheddar cheese was up 1.1%, and skim milk powder was up 0.6%. Pulling the average down were the categories of whole milk powder (-2.2%), buttermilk powder (-1.8%) and anhydrous milkfat (-0.3%).

The GDT platform offers dairy products from several global companies: Fonterra (New Zealand), Darigold, Valley Milk and Dairy America (U.S.), Inalpi (Italy), Arla (Denmark), Arla Foods Ingredients (Denmark), BMI (Germany), Kerry Dairy (Ireland) and Solarec (Belgium).

The next GDT auction is March 18.

NMPF farmers prepare for policy challenges

Dairy farmers from across the nation celebrated fairer milk prices for farmers and pledged to work together to meet challenges on labor, trade and other issues at the NMPF’s board of directors meeting.

“We’re in a fast-moving environment, with a new administration and things changing every day,” said NMPF board Chairman Randy Mooney, a farmer from Rogersville, Missouri, in remarks at the meeting. “We are happy to have NMPF watching out for us here in Washington.”

NMPF’s board meeting brought together more than 50 farmers and dairy cooperative leaders at the nation’s largest dairy farmer trade organization, which serves as the policy voice for dairy farmers and the cooperatives they own in Washington.

Dairy farmers at the meeting heard presentations updating pressing dairy issues, including agricultural labor, trade and highly pathogenic avian influenza (HPAI) H5N1 bird flu, which has now been circulating in dairy cattle for roughly one year. Milk producers also celebrated a policy win – nationwide adoption of a new Federal Milk Marketing Order (FMMO) that begins taking effect on June 1. The plan, spearheaded by NMPF, culminates a four-year process of seeking fairer pricing for farmers and cooperatives.

“The top two issues we have today are immigration and tariffs,” Mooney said. “Nothing else means anything else to us if we don’t have anyone to milk our cows.” On trade, he said day-to-day turbulence doesn’t change dairy’s commitment to building exports. “We intend to play in the world market, and we will invest in the world market to do it,” he said.

NMPF’s board also charted a path toward a successor organization to the Cooperatives Working Together export assistance program, which has helped dairy build overseas markets. Reflecting that reformation, the board voted to rename the program NEXT (NMPF Exports & Trade) while authorizing a new business plan for final approval in June. The board also welcomed two new directors:

  • Mark Leichtfuss of FarmFirst Dairy Cooperative in Wisconsin
  • Richard Hill of Upstate Niagara Cooperative in New York

NMPF announces Vitaliano Legacy Scholarship

The NMPF announced the creation of the Dr. Peter Vitaliano Legacy Scholarship as part of the National Dairy Leadership Scholarship Program. The award will be used to help support a student who demonstrates attributes exemplified by Vitaliano to honor his longtime commitment to the success of U.S. dairy producers and cooperatives.

The program also hopes to raise $500,000 this year for an endowment to support the longevity of the program, including this new legacy scholarship.

Vitaliano served as the vice president of economic policy and market research for NMPF through 2024, leading efforts in implementing, conducting and communicating all economic analysis supporting the federation’s programs relating to domestic and international dairy policy. He has extensive experience with, and knowledge of, U.S. dairy markets and domestic and international agricultural and trade policy.

The scholarship is designed to support individuals who demonstrate a passion for the industry through community engagement, academic interests and advocacy. Individuals selected for the Vitaliano Legacy Scholarship will also demonstrate experience with mentoring, coaching or teaching.

The Vitaliano Legacy Scholarship will be available to applicants in the 2025-26 application cycle. To find out more information or to donate, visit the scholarship webpage.

Scholarships available

Several scholarships for graduate and undergraduate students were announced this week, including:

  • Graduate students are invited to apply for the Dairy Cattle Reproduction Council (DCRC) Scholar program. The award winner will earn an expense-paid trip to attend the DCRC Annual Meeting, Nov. 11-13, in Middleton, Wisconsin. The application deadline is April 30.
  • The Holstein Foundation announced the creation of the Raymond LeBlanc Memorial Scholarship for undergraduate students. Applications for this $1,000 scholarship are now open, with a submission deadline of April 1.
  • The Holstein Foundation also announced applications for the 2025 George Miller Memorial Scholarship are due April 1. Qualifying college students are invited to apply for the $1,000 scholarship.
  • Edge Dairy Farmer Cooperative is offering $10,000 in secondary education scholarships to its membership. Two $2,000 scholarships will be awarded to current students pursuing a degree in a four- or two-year program, and three $2,000 scholarships will be awarded to high school seniors. The application portal will remain open until April 18, and applications must be submitted by that date.

Teamsters at Foremost Farms ratify contract

Teamsters dairy workers at Foremost Farms USA have overwhelmingly ratified a strong four-year agreement. The new contract will provide Teamsters Local 120 members with higher wages, increased pension contributions and improved health care.

“This company has generated a lot of revenue because of our hard work,” said Brad Lusk, a Local 120 shop steward. “We fought hard for this contract, and now, every worker at this company is better off because we were ready to strike to get what we deserved.”

The deal comes after workers forced management to take their demands seriously by resoundingly authorizing a strike. In addition to better pay and benefits, Lusk and his co-workers also secured a tripled premium rate for night shifts, more bereavement time and double the allowance for work boots.

Local 120 and Teamsters Local 662 represent workers at nearly all of Foremost Farms USA’s dairy processing facilities in the Midwest.