The so-called “Liberation Day” came and went the week of March 31, a name given by President Donald 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 percent baseline tariff on all imports to the U.S. and would be in addition to previous tariffs. Custom, higher tariffs were 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 those countries will respond.

China has put retaliatory tariffs on U.S. products, including dairy, he said, and for China and Mexico, the tariffs have largely been delayed on goods that are compliant under the U.S. Mexico, Canada (USMCA) Free Trade Agreement.

As of April 4, Mexico had not announced any retaliatory action but Fuess says the markets are watching this closely. Retaliatory action from countries like Southeast Asia, where we send a significant amount of dairy exports, could have a big impact on 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 responded, stating; “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, president and CEO of the National Milk Producers Federation. “In fact, 20 percent 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 United States, 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. dairy 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,” says the NMPF and USDEC.

Meanwhile, the March Federal order Class III milk price was announced this week at $18.62 per hundredweight, down $1.56 from February, $2.28 above March 2024, and matches the December 2024 price. The three-month average stands at $19.71, up from $15.86 a year ago, and compares to $18.44 in 2023.

Wednesday’s futures settlements portend an April price at $17.13; May, $17.26; June, $17.18; and July at $17.78, with a peak at $18.57 in October.

CME Cheddar block cheese climbed to $1.6650 per pound Wednesday but fell back to $1.63 Thursday morning, following a Friday close at $1.6350. The barrels hit $1.6975 Wednesday, but closed Thursday at $1.66, after closing Friday at $1.6350. Traders are absorbing the latest tariff news and were anticipating Friday afternoon’s February Dairy Products report.

Midwest cheesemakers say buying activity remains quiet, according to Dairy Market News, while some say ordering the past two weeks underwent a bullish change, particularly compared to the first two months of the year. 

The All Milk Price averaged $23.60 per cwt. with a 4.43 percent 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 percent test.

“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, Mo. “Income over feed costs in February were above the $8 per cwt. level needed for steady to higher milk production for the 16th 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 2024 were $13.45 per cwt., according to Brooks, and “Income over feed was above the level needed to maintain or grow milk production, and up $5.45 per cwt. from 2023’s level.”

“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.

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

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

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 percent 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 before the U.S. Senate Agriculture Committee, lawmakers, nutrition experts, and school officials emphasized the need to restore whole and reduced-fat (2 percent) milk to federal school meal programs. 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 to the more than 30 million students who rely on school breakfast and lunch every day.

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 percent and 94 percent of school-age boys and girls are failing to meet the recommended levels of dairy intake.

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.