How tariffs may affect dairy markets

Each year, IFCN Dairy reports on the size of the global raw milk pool — currently around 1 trillion kilograms per year. That’s roughly 11 fluid ounces of milk equivalent per person per day. Just over half of this milk is processed in factories, mostly from cows — the focus here.

Dairy processors and consumers are increasingly connected across borders. Three main exporters, the United States, New Zealand, and the European Union (EU), supply a range of net-importing countries, many in tropical regions. Trade between these regions accounts for approximately 15% of all processed milk, enough to link market prices across most open dairy markets worldwide.

Interestingly, the U.S. is both an importer and an exporter of dairy. It brings in products like specialty cheeses from Italy — varieties not widely produced in the U.S. — while exporting goods like skimmed milk powder and Mozzarella. The U.S. currently produces 108% of the dairy protein and 101% of the dairy fat it consumes. This surplus underscores a key motivation: Keeping trade flows open to help prevent domestic oversupply and price pressure.

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