Trump's Liberation Day is adding to already turbulent trade discussions between the US and other nations

The so called “Liberation Day” came and went this week, a name given by President Trump to implementing reciprocal tariffs that apply to all trading nations and added to recent tariffs on aluminum, steel, cars, plus all goods from China.

Lucas Fuess, Rabobank senior dairy analyst, speaking in the April 7 Dairy Radio Now broadcast, said Trump announced a 10% baseline tariff on all imports to the U.S. and would be in addition to previous tariffs. Custom, higher tariffs were also announced for the worst offenders, according to Fuess, which include about 60 countries, and designed to offset tariffs those countries levy on U.S. imports. They are in addition to actions already taken on countries like China, Canada and Mexico, he said, but we do not know how the countries will respond.

China announced that it would reciprocate with a 34% tariff on U.S. products and banned some American companies from doing business there. Trump’s tariffs have largely been delayed on goods that are compliant under the U.S. Mexico, Canada (USMCA) Free Trade Agreement.

As of Friday morning, Mexico had not announced any retaliatory action, but Fuess said the markets are watching this closely. Retaliatory action from countries like Southeast Asia, where we send a significant amount of dairy exports to, could have a big impact the U.S. dairy industry. Exports are critical, he concluded, as 2024 saw the second highest dairy export level ever on a value basis.

The National Milk Producers Federation and the U.S. Dairy Export Council stated, “Tariffs can be a useful tool for negotiating fairer terms of trade. To that end, we are glad to see the administration focusing on long-time barriers to trade that the European Union and India have imposed on our exports. The administration has rightly noted both countries’ penchants for restricting sales of American products,” said Gregg Doud, NMPF President and CEO. “In fact, 20% reciprocal tariffs are a bargain for the EU considering the highly restrictive tariff and nontariff barriers the EU imposes on our dairy exporters. If Europe retaliates against the U.S., we encourage the Administration to respond strongly by raising tariffs on European cheeses and butter. We also appreciate the President’s recognition of the sizable barriers facing U.S. exports into the Canadian market.”

“Through productive negotiations, this administration can help achieve a level playing field for U.S. dairy producers by tackling the numerous tariff and nontariff trade barriers that bog down our exports.”

Speaking of exports, U.S. dairy exports were down in February, even when adjusted for Leap Year. HighGround Dairy (HGD) reminds us however that, last February held the monthly record, and February 2025 ranks second.

On a 30-day adjusted basis, the month-to-month change was a plus 11.8%, says HGD. “An increase is typical from January to February, and the five-year average build between these months is 14%, meaning 2025 was close to the mean.”

Cheese exports surged to 99 million pounds, up 7.3% from a year ago, thanks to U.S. competitive pricing. Domestic cheese prices have trended below global benchmarks since late October, says HGD. Sales to Mexico fell 6% but were offset by increases to South Korea and Australia. Cheese imports were up 1.7%.

Butter exports, at 11.5 million pounds, were up 134.2%, while butter imports, at 12.7 million, were down 2.1%.

Nonfat and skim milk powder exports remain subdued, amounting to 106.9 million pounds, down 25.7%, and dry whey hit 34.6 million, up 3.2%.

The March Federal order Class III milk price was announced at $18.62 per hundredweight, down $1.56 from February, $2.28 above March 2024, and matched the Dec. 2024 price. The three-month average stands at $19.71, up from $15.86 a year ago, and compares to $18.44 in 2023. Late Friday morning futures portend April at $17.02, May at $16.87, with an $18.30 peak in October.

The March Class IV price is $18.21, down $1.69 from February, $1.88 below a year ago, and the lowest Class IV since Dec. 2024. Its three-month average is at $19.61, down from $19.78 a year ago, and compares to $19.08 in 2023.

CME cheddar block cheese climbed to $1.6650 per pound Wednesday, highest since March 14, but closed the first Friday of April at $1.64, up a half-cent on the week and 12.50 cents above a year ago, as traders awaited the afternoon’s February Dairy Products report. The barrels hit $1.6975 Wednesday, highest since March 13, but finished Friday at $1.66, 2.50 cents higher, and 13 cents above a year ago. There were 47 sales of block on the week and 16 of barrel.

Midwest cheesemakers say buying activity remains quiet, according to Dairy Market News (DMN), while others say ordering the past two weeks underwent a bullish change, particularly compared to the first two months of the year. Inventories continue to build. Milk availability grew noticeably this week with mid-week prices as low as $4.50-under Class. Cheese markets have found stability in the $1.60s, says DMN, but that concerns cheesemakers who are paying for relatively pricey milk and experiencing quieted cheese demand.

Seasonally strengthening milk output in the West is providing plenty for cheese manufacturers and output is seasonally stronger. Availability of varietal cheese is mixed, with certain varieties heavily allocated to meet contractual obligations through second quarter. Retail demand is steady to stronger. Food service is weaker and export demand is mixed, though domestic prices are competitive with international levels, says DMN.

Cash butter closed Friday at $2.2950 per pound, down 5.50 cents, and 64.50 cents below a year ago, on 28 sales on the week.

Central butter manufacturers say demand is still somewhat stable even as holiday needs have generally been met. The focus now is on fall holiday demand. Cream availability is still ample, according to DMN.

Western cream also remains readily available however, certain parts of the region report that it has become a little less available, and “loads too inexpensive to pass up are no longer around,” says DMN. For the most part, churns continue to run at-or-near full capacity. Retail butter demand is steady to strong. Food service is weaker. Export are steady to strong, thanks to competitive U.S. prices.

Grade A nonfat dry milk saw its Friday close at $1.1575 per pound, down a nickel on the week, but still 2.50 cents above a year ago on 12 sales for the week.

Dry whey closed the week at 49 cents per pound, down a penny on the week but a dime above a year ago, with 6 CME sales put on the board for the week.

U.S. farmers say they will plant 95.3 million acres of corn this spring, according to USDA’s annual Prospective Plantings report. That would be an increase of 4.7 million acres or 5% from 2024 if they do. Planted acreage is expected to be up or unchanged in 40 of the 48 estimating states, according to the report.

Soybean plantings were at 83.5 million acres, down 4%. Planted acreage is down or unchanged in 23 of the 29 states. Wheat acreage would be down 2% and cotton acreage down 12%. Weather, politics, tariffs, input costs and crop prices could change farmer’s intentions before seed is put in the ground.

A sharp rise in corn, a higher soybean price, and a lower All Milk Price pulled the February milk feed price lower. The USDA’s latest Ag Prices report shows the ratio at 2.68, down from 2.82 in January, and compares to 2.13 in Feb. 2024.

The All Milk Price averaged $23.60 per cwt. with a 4.43% butterfat test, down 50 cents from January which had a 4.46 test, and compares to $20.60 in Feb. 2024, with a 4.30% test.

The national corn price averaged $4.58 per bushel, up 29 cents from January, and 22 cents above a year ago. Soybeans averaged $10.20 per bushel, up 20 cents from January, but $1.70 below a year ago. Alfalfa hay averaged $159 per ton, down $2 from January, and $42 below a year ago.

The February average cull price for beef and dairy combined was at $135 per cwt., up $9 from January, $26 above Feb. 2023, and $63.40 above the 2011 base average.

“Milk production margins moved lower for the second time in the past three months but remained at historically high levels and 75 cents per cwt. below January,” says dairy economist Bill Brooks, of Stoneheart Consulting in Dearborn, Missouri. “Income over feed costs in February were above the $8 per cwt. level needed for steady to higher milk production for the 16^th month in a row,” says Brooks. “Input prices were mostly higher with two of the three input commodities inside of the top ten for February all-time. Feed costs were the ninth highest ever for the month of February and increased 25 cents from January.”

“Milk income over feed costs for 2025, using March 31 CME settling futures prices for milk, corn, and soybeans plus the Stoneheart forecast for alfalfa hay, are expected to be $13.24 per cwt., a loss of 21 cents per cwt. versus 2024. It would also be above the level needed to maintain or grow milk production, and unchanged from last month’s estimate,” Brooks concludes.

The latest Margin Watch (MW) from Chicago-based Commodity and Ingredient Hedging LLC. says “Dairy margins improved slightly over the last half of March as milk futures held steady while the feed markets continued to sell off.”

The MW detailed the latest Milk Production data and stated that the report “Showed expanding milk output in February driven largely by an increasing dairy cow herd.” “Increasing component levels also added to production. February cream production increased by 12.7 million pounds or 4% above last year while milk protein production increased by 3.1% during the month and nonfat solids were 2.3% higher than February 2024,” according to the MW.

The USDA’s weekly Slaughter report shows 52,500 dairy cows were sent to slaughter the week ending March 22, down 5,100 or 8.9% from a year ago. Year to date, 644,000 head had been culled, down 47,100 or 6.8% from a year ago.

Western United Dairies reports that, as of March 26, 274 California dairy herds were still under quarantine for bird flu, according to Dr. Michael Payne, UC Davis School of Veterinary Medicine. “A larger number, 493 dairies, have been released. No human cases have been reported since January, and our poultry farms are increasingly repopulating their flocks. Using FEMA’s terminology, we are starting to move past responding to the emergency to recovering from it.”

Skim milk powder led the April 1 Global Dairy Trade auction higher. The weighted average was up 1.1% after holding steady on March 18. Volume fell to 38.9 million pounds, down from 43.1 million on March 18, and the lowest since June 18, 2024. The average metric ton price, at $4,250 U.S. was up from $4,245.

Skim milk powder was up 5.9%, after slipping 0.4% on March 18. Whole milk powder however, inched 0.1% lower, after gaining 0.2% on March 18. Buttermilk powder was down 5.6% and lactose was down 2.6%. Anhydrous milkfat was up 2.3%, after dropping 1.8%, while butter was down 1.2%, following a 1.1% gain. Cheddar was up 1.7%, after a 1.0% rise, while mozzarella dropped 4.0%, following a 5.1% gain last time.

StoneX says the GDT 80% butterfat butter price equates to $3.3643 per pound U.S., down 2.9 cents, after rising 4 cents last time, and compares to CME butter which closed Friday at a cheap $2.2950. GDT cheddar equated to $2.2763, up 1.9 cents, and compares to Friday’s CME block cheddar at a bargain $1.64. GDT skim milk powder averaged $1.3044 per pound, compared to $1.2379 last time. Whole milk powder averaged $1.8424 per pound, up from $1.8380 CME Grade A nonfat dry milk closed Friday at $1.1575 per pound.

HGD charged that “Trump's Liberation Day” was “Adding to already turbulent trade discussions between the U.S. and other nations. Ongoing concerns around global trade disruptions, paired with generally tight milk supplies from the EU, have continued to support GDT commodity values. Meanwhile, the stronger milk flows previously seen out of New Zealand have eased significantly, and current supplies are likely struggling to keep up with committed demand."

In politics, the International Dairy Foods Association reported “A new dairy incentive program aimed at encouraging healthy behavior among people participating in the Supplemental Nutrition Assistance Program, or SNAP, is gaining bipartisan support in the U.S. House and Senate.

“The Dairy Nutrition Incentive Program Act of 2025 seeks to address that 90% of Americans do not consume enough milk and other nutritious dairy products according to federal dietary guidelines,” the IDFA stated. The legislation would provide SNAP participants with a dollar-for-dollar match for the purchase of milk, cheese, yogurt and cultured dairy products.

And, in a hearing Tuesday before the U.S. Senate Agriculture Committee, lawmakers, nutrition experts and school officials emphasized the need to restore whole and reduced-fat milk to federal school meal programs, according to the IDFA. The focus of the hearing was the Whole Milk for Healthy Kids Act, a bipartisan bill that would allow schools to offer these milk options. For more than a decade, federal regulations have restricted schools to offering only fat-free and low-fat milk, despite widespread under consumption of dairy among children. Between 68% and 94% of school-age boys and girls are failing to meet the recommended levels of dairy intake, depriving them of essential nutrients during key developmental years,” says the IDFA.

Meanwhile, the U.S. Dairy Export Council, National Milk Producers Federation, and Consortium for Common Food Names praised this week’s reintroduction of the Safeguarding American Food and Export Trade Yields Act. The legislation would direct USDA to partner with the U.S. Trade Representative to prioritize the protection of common names like “parmesan” and “bologna” in international trade negotiations.

Lee Mielke is a graduate of Brown Institute in Minneapolis, Minnesota. He’s formerly the voice of the radio show “DairyLine” and his column appears in agricultural papers across the U.S. Contact him at lkmielke@juno.com.