Fonterra CEO Warns U.S. Tariff Policies Could Weaken Global Dairy Demand
Source: DairyNews.today
Fonterra Cooperative Group, the world’s largest dairy exporter, has raised concerns that proposed tariff policies by U.S. President-elect Donald Trump could dampen demand for its products both domestically and internationally.
“The buying power of the domestic consumer in North America is going to be impacted,” Fonterra CEO Miles Hurrell said in an interview with Radio New Zealand on Wednesday. “What will that do to the North American economy, given its global influence, and how will it affect international market sentiment?”
Tariff Uncertainty
Trump has threatened widespread tariffs, targeting imports from China and imposing a blanket 10% duty on other trading partners. The U.S. is New Zealand’s second-largest export market, accounting for NZ$950 million ($545 million) in dairy exports in the year through September.
Hurrell expressed concern over the shift in global trade dynamics. “We’re entering an uncertain phase after decades of countries working collaboratively. Now it feels like everyone is turning their backs on one another, and that’s a bigger concern for us,” he said.
Record Forecast Amid Global Price Recovery
Despite the uncertainty, Fonterra recently forecast a record milk payment for its New Zealand farmers, buoyed by strong global dairy prices. Hurrell attributed the recovery to a rebalancing in supply and demand, particularly in China.
China, a critical market for Fonterra, had seen reduced demand during a period of slower economic growth, compounded by an expansion in its domestic dairy herds. “Now you’re seeing herds being culled because there’s simply no return,” Hurrell explained. “Supply and demand are moving back into balance, and China is re-entering the market.”
While Fonterra’s strong forecast underscores optimism for global dairy prices, Hurrell cautioned that protectionist policies and trade uncertainties could pose significant risks to international markets. The potential for disrupted trade flows looms large as businesses worldwide brace for the impact of evolving U.S. trade policies.
Tariff Uncertainty
Trump has threatened widespread tariffs, targeting imports from China and imposing a blanket 10% duty on other trading partners. The U.S. is New Zealand’s second-largest export market, accounting for NZ$950 million ($545 million) in dairy exports in the year through September.
Hurrell expressed concern over the shift in global trade dynamics. “We’re entering an uncertain phase after decades of countries working collaboratively. Now it feels like everyone is turning their backs on one another, and that’s a bigger concern for us,” he said.
Record Forecast Amid Global Price Recovery
Despite the uncertainty, Fonterra recently forecast a record milk payment for its New Zealand farmers, buoyed by strong global dairy prices. Hurrell attributed the recovery to a rebalancing in supply and demand, particularly in China.
China, a critical market for Fonterra, had seen reduced demand during a period of slower economic growth, compounded by an expansion in its domestic dairy herds. “Now you’re seeing herds being culled because there’s simply no return,” Hurrell explained. “Supply and demand are moving back into balance, and China is re-entering the market.”
While Fonterra’s strong forecast underscores optimism for global dairy prices, Hurrell cautioned that protectionist policies and trade uncertainties could pose significant risks to international markets. The potential for disrupted trade flows looms large as businesses worldwide brace for the impact of evolving U.S. trade policies.
