American dairy exports may suffer as early as March

At the very least, Canada is beginning to scrutinize products from the U.S. more closely and is tightening control over certification requirements within the USMCA special zone – previously, this certification was ignored, and trade flowed freely.

Although dry whey and lactose were not included in China’s reciprocal tariff list, whey concentrate and isolate were hit with an additional 10% duty. This means that U.S. products are already losing to their European counterparts in terms of final pricing.

Exchange stocks remain high. Despite a decline in production volumes, the biggest challenges are in the dry milk segment, with stocks estimated at around 140,000 tons.

The most telling trend – the monthly change in Chicago spot prices:
• Butter -5% ($5,000/t)
• Dry milk -12% ($2,600/t)
• Cheese (blocks) -13% ($3,560/t)
• Dry whey -20% ($1,080/t)

Commentary from Ever.Ag Insights:
Markets this week are showing distinctly bearish sentiment. Prolonged uncertainty and almost daily fluctuations in tariff policy are driving markets downward – from stocks to currencies and commodities. The dairy sector is under increasing pressure: inventories are already extremely high and will continue to grow as we enter a season of strong supply, plus a number of new plants are coming online.

Even more importantly, demand remains weak. Consumers are preparing for economic shocks triggered by inflationary fluctuations and trade wars. Foodservice traffic is underwhelming. Credit card debt continues to rise, and delinquency rates are increasing.