Here’s What We Export to China
Chinese tariffs on U.S. agricultural products, including those placed on dairy products, have had a significant impact on commodity trading since mid-June. While virtually all products traded on the CME, including Class III futures, took a hit, product prices are starting to slowly recover.
As you can see from the table, China imports a significant portion of their milk powder products from the U.S., and tariffs on these products have had an impact on powder prices at the CME. Nate Donnay, director of dairy market intelligence at INTL FCStone, estimates a 2 to 5-cent range of negative impact on dry whey prices, and it appears the market has already realized this fluctuation.
“Exports will indeed slow down over the next few months until buyers have more clarity on the tariffs,” Nick Buyse, a Risk Management Consultant at INTL FCStone says. “Although China will continue to buy from U.S. suppliers as it will be difficult for them to source [product] and meet their specs on all of their needs from the EU.”