Tag: Dairy trade agreements

Trade Progress Poised to Reel in Revenue

Posted on by Rachel Ravencraft

In the turbulent tides of overseas commerce over the past year, U.S. negotiators landed a trophy bass in February: a trade agreement with Indonesia that we’ve been trying to hook for decades. It’s a big fish for dairy.

Following years of advocacy by NMPF and our partners at the U.S. Dairy Export Council and the Consortium for Common Food Names, the deal announced Feb. 19 will eliminate tariffs on all U.S. dairy exports, ease regulatory snarls and protect common cheese names like “parmesan.” Indonesia is already the eighth-biggest market for our dairy products — but it’s the world’s fourth most-populous nation, giving its growth potential for U.S. producers nowhere to go but up.

The Indonesia deal was the ninth trade deal secured to date by U.S. negotiators that includes new market access for U.S. dairy products. It’s a good one, but far from the only gain. Some other highlights of these pending agreements include:

  • Elimination of 100% of tariffs on U.S. dairy products in most deals and notable tariff cuts in others, helping to provide competitive parity to suppliers from Oceania or the EU. A great example of this is the level playing field we now have for extended shelf-life milk into Taiwan.
  • Bans on the introduction of dairy facility listing requirements in all these markets; in Indonesia this wipes away a process that could take over three years for a processing plant to navigate before it gained approval to ship.
  • Commitments in each deal to protect U.S. exporters’ use of up to 40 common cheese names like “parmesan,” a result that’s particularly important as the European Union’s Free Trade Agreement network expands, threatening to limit U.S. growth opportunities to market cheeses with widely recognized terms.

This successful expedition would not have been possible without a world-class captain. Chief Agricultural Negotiator Julie Callahan was instrumental in securing these trade deals that will bring real results back to U.S. farmers. NMPF thanks her and the USTR team, all of whom we have had the honor of working with closely, for the substantial efforts made to bring these agreements home.

And even though a recent Supreme Court ruling on tariffs added even more uncertainty to trade policy, the progress made so far also underscores an important fact about dairy’s future: Trade continues to grow, and the foundations for future growth are only getting stronger, as bilateral negotiations continue and the dairy industry continues patiently building markets.

2025 was one of the strongest trade years ever for dairy products. Volume growth for U.S. dairy exports rose 4% over 2024 as measured in milk solids equivalent, ending up second only to 2022 in all-time shipments. Measured in value, U.S. dairy exports rose 15% over 2024 to $9.63 billion, just short of the 2022 record of $9.66 billion.

The star performer of the year? Cheese. Shipments in 2025 rose 20% over the previous year, which also set a record. New domestic processing capacity helped, as did growing familiarity with the quality and taste of American-made products. Just as impressive, the record sales were spread across the globe, lessening the risk that over-reliance on any single market could create risk in the future: In 2025, 39 countries bought more than 1,000 metric tons of U.S. cheese.

Butterfat and high-protein whey also saw banner years, showing the broad-based nature of sales growth. While conflicts between the U.S. and trading partners are throwing exports into doubt in some areas, in dairy, we’re not seeing widespread effects. In fact, it’s the opposite: U. S. dairy is highly competitive in the global marketplace, and we’re building stable, collaborative, relationships that we are confident will stand the test of time and contribute to long-term prosperity for U.S. dairy farmers.

We have a lot of folks to be thankful for on this journey, from our USDEC and CCFN colleagues to the cooperatives who provide high quality products and invaluable expertise. But looking ahead, we need to capitalize. At NMPF, a big part of our trade support comes from our NEXT (NMPF Exports & Trade) program, launched in the second half of last year.

NEXT helps create export opportunities for U.S. dairy producers in international markets, by overcoming trade barriers and keeping domestic dairy products competitively priced overseas. The 142 million pounds of export volume it assisted in its half-year nearly matched the full-year 2024 volumes under the prior Cooperatives Working Together program, which NEXT succeeded.

The program continues to test innovative ways to grow dairy’s market share through new initiatives, including expanding its product mix and providing targeted, additional support beyond primary assistance in key markets — places where the U.S. is at a tariff disadvantage or the U.S. has the ability to gain market share. Cooperatives interested in joining NEXT, or wanting to know more about the program, should contact next@nmpf.org.

Improved trade access coming soon in numerous markets through bilateral agreements, a full year of NEXT, and the continued collaboration of dairy partners builds great momentum for 2026 in U.S. dairy shipments overseas.

Keep that in mind as you read about tariffs, tariff limitations, tariff alternatives, and trade tensions. Though the waters may not be calm, a skillful angler can still net an impressive haul. And thus far, we in dairy have been casting very effectively, and reeling in a brighter future for U.S. dairy products.

Gregg Doud

President & CEO, NMPF

 

USMCA: An opportunity dairy can’t miss

Posted on by Rachel Ravencraft

By Shawna Morris, Executive Vice President, Trade Policy & Global Affairs

The first mandatory review of the U.S.-Mexico-Canada Agreement (USMCA) will take place in 2026, bringing all three countries together to evaluate the agreement’s first five years and consider changes. For U.S. dairy producers, this review is a critical opportunity to finally secure the gains promised under USMCA.

When USMCA was implemented in 2020, it was expected to deliver a limited yet important expansion into the Canadian market for U.S. exporters. The deal also established rules to limit Canada’s offloading of artificially low-priced dairy ingredients into global markets and to safeguard the ability of U.S. producers to use common names like “Parmesan” in Mexico. Five years in, there are still shortfalls in each of these key areas.

Canada’s TRQ manipulation and export loopholes

From day one, Canada has repeatedly violated its obligations through its tariff-rate quota (TRQ) allocations, which are designed to allow U.S. producers to export a certain quantity of a product tariff-free. However, Canada has manipulated the system by giving the vast majority of the quota allotments to Canadian processors instead of allowing others throughout the Canadian supply chain a fair shot at securing and filling the quotas. As a result, dairy TRQ fill rates remain chronically low. For example, U.S. dairy exporters have missed out on over 15,000 metric tons of bulk cheese exports over the past five years — and that is just one quota.

Adding insult to injury, Canada has created a new workaround that enables its producers to continue to dump artificially low-priced dairy proteins, which undermines commercially priced U.S. products outside of Canada. National Milk Producers Federation (NMPF) estimates that Canada’s dairy protein exports benefiting from this policy equate to over $740 million of Class IV Skim paid to producers over the last four years.

Mexico’s common name commitments

Mexico is a valued and vital partner. Unfortunately, it has fallen short in one important USMCA area: protection of common cheese names.

Five years into the USMCA agreement, Mexico has failed to implement regulations to ensure that no new barriers arise to the use of common cheese names. This leaves many widely used names like “Feta” and “Parmesan” vulnerable to geographical indication restrictions as the European Union advances its trade deal with Mexico toward implementation.

A coordinated and forceful response

In preparation for next year’s review, the NMPF and the U.S. Dairy Export Council (USDEC) have mounted a coordinated and proactive strategy.

Last week, with robust support from across the U.S. dairy community, 74 members of the House of Representatives urged the U.S. Trade Representative (USTR) to address these issues. To complement that call, NMPF and USDEC testified before USTR on Dec. 3 to outline the importance of ensuring USMCA lives up to its potential.

To tackle Canada’s growing policy-driven dairy exports, NMPF and USDEC also testified and submitted comments to the U.S. International Trade Commission as part of its investigation into U.S. competitiveness in nonfat milk solids — an inquiry launched at USTR’s request following NMPF and USDEC advocacy regarding Canada’s distortions of global dairy markets.

Meanwhile, NMPF, USDEC, and the Consortium for Common Food Names continue to work with the U.S. and Mexican governments to ensure that the use of common names can continued unimpeded in Mexico.

Conclusion

These efforts reflect a broader strategy by NMPF and USDEC, working together with the wider U.S. dairy community, to enter the 2026 USMCA review with a strong, well-documented case for holding trading partners accountable and ensuring that U.S. dairy producers receive the market access and fair competition they were promised.

 

This column originally appeared in Hoard’s Dairyman Intel on Dec. 22, 2025.