Page 25 - Dairy Dimension - July Aug 25
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| Volume 1 | Issue 5 | July-Agu 2025  GLOBAL NEWS


 Fonterra Raises Milk Price   FAO Dairy Price Index Holds   Italy–U.S. Dispute over

 Forecast  Flat in July  Cheese Tariffs

 Fonterra, New Zealand's largest dairy cooperative, has   The FAO Dairy Price Index averaged 152.6 points in   Italy has lodged complaints with U.S. customs authorities
 revised its 2024/25 farmgate milk price forecast, lifting   August 2025, easing 1.3% from July and extending its   after reports that Parmigiano Reggiano and Grana
 the midpoint from NZ$10.00 to NZ$10.15 per kilogram   downward trend for a second month. Despite this   Padano shipments were being charged tariffs higher
 of milk solids (kgMS). The range was narrowed to   softening, the index still stands 16.2% above its August   than the 15% agreed under the new EU–U.S. trade
 NZ$9.75–10.55, signalling greater confidence in market   2024 level, underscoring the broader tightness in global   framework. Italian dairy associations have warned that
 stability. The upward revision reflects steady global dairy   dairy markets. The decline was mainly driven by lower   the discrepancy risks eroding margins and damaging
 prices, strong demand from Asia, and a solid sales book   quotations for butter, cheese, and whole milk powder,   competitiveness in the lucrative American market, where
 for powders and fats. For New Zealand farmers, the   as robust production in New Zealand and the European   premium Italian cheeses enjoy strong demand. The issue
 change translates into improved cash flow, particularly   Union coincided with muted import demand from key   comes just weeks after Brussels and Washington
 crucial during a year of high input costs. For global   Asian buyers, particularly in China and Southeast Asia.   announced progress toward easing agri-food trade   NEWS
 buyers, however, higher farmgate prices may reinforce   However, the downward pull was partly cushioned by   tensions. Italy is pushing for enforcement of agreed tariff
 already firm Oceania benchmarks, affecting import-  firmer skim milk powder (SMP) values, reflecting   terms, highlighting sensitivities around origin-linked
 dependent countries. The forecast also sets expectations   constrained availability in New Zealand. This divergence   cheeses, which are vital to the country's export
 for milk supply recovery after a challenging previous   within product categories points to a market balancing   economy. For dairy professionals, this development
 season. For dairy professionals, Fonterra's pricing signals   act: strong supply-side performance in traditional   underscores how tariff administration, not just headline
 remain a barometer for global commodity sentiment.   exporters is weighing on fat- and protein-rich dairy   agreements, can create uncertainty. U.S. importers may
 The revised forecast suggests that while volatility   commodities, while selective tightness in powders   hesitate to place large orders amid ambiguity, and Italian
 persists, demand from Asia and the Middle East   signals continued vulnerability to supply disruptions and   exporters face potential short-term disruptions. The
           dispute illustrates the fragility of transatlantic trade
 continues to underpin markets, providing relative   shifting demand patterns.  frameworks and the importance of vigilance in
 stability compared to recent years.  France Containment of   monitoring customs enforcement, especially for high-
 China Extends Anti-Subsidy   Lumpy Skin Disease  value dairy categories where margins are already   GLOBAL

 Probe into EU Dairy  France has successfully contained a recent outbreak of   squeezed by rising input costs.
           EU–U.S. “Fair and Balanced”
 China has extended its anti-subsidy investigation into   lumpy skin disease (LSD), reporting zero new cases after
 European Union dairy imports — covering cheese, milk,   August 22 thanks to mass vaccination efforts. Earlier in   Trade Framework Advances
 and cream — until February 2026. The investigation,   the summer, LSD cases disrupted cattle movement,   The EU and U.S. have announced progress on a
 launched in 2024 amid broader EU–China trade tensions,   raising alarms for raw-milk cheese producers and   framework for “reciprocal, fair and balanced” trade, with
 now prolongs uncertainty for exporters in France,   livestock exporters. The rapid containment is being   provisions set to extend most-favoured nation (MFN)
 Ireland, and the Netherlands. EU dairy companies fear   hailed as a success for coordinated veterinary   treatment to certain dairy categories beginning
 potential countervailing duties that could erode   intervention and EU-level support. For French dairy, the   September 1. The framework aims to reduce disputes
 competitiveness in China, one of the world's largest   immediate relief is significant: LSD outbreaks risk not   and stabilise trade relations, but agricultural carve-outs
 growth markets for cheese and premium dairy. The   only livestock health but also France's reputation as a   remain politically sensitive. Dairy is particularly
 extension underscores how trade disputes in sectors like   premium dairy exporter. The episode, however,   contentious: the U.S. seeks expanded access for cheese,
 electric vehicles are spilling into agri-food. For European   highlights ongoing vulnerabilities in Europe to   while the EU is protective of its geographical indications
 producers already grappling with flat domestic demand,   transboundary animal diseases, especially amid climate-  (GIs). While headline progress is welcome, details remain
 China remains a critical growth outlet. The delay,   linked shifts in vector patterns. For dairy professionals,   limited, leaving exporters uncertain about the exact
 however, hampers forward contract negotiations and   the incident reinforces the economic stakes of animal   scope of benefits. For dairy professionals, the framework
 supply chain planning. For dairy professionals, the   health. A few weeks of disruption threatened PDO   offers both opportunities and risks. On the one hand,
 episode illustrates how trade politics increasingly shape   (protected designation of origin) cheese exports and   reduced tariff barriers could expand market access for
 dairy markets. Exporters must prepare for scenarios of   raised questions about compensation frameworks for   certain EU dairy products. On the other, unresolved
 restricted Chinese access and diversify markets in Asia-  farmers. With international markets increasingly   disputes over GI protections and tariff-rate quotas mean
 Pacific and the Middle East. Equally, it reflects China's   sensitive to disease risk, the French case demonstrates   trade frictions could flare up again. The framework   For latest news
 growing use of trade instruments to protect domestic   how fast and coordinated veterinary responses can   should be seen as a step toward stabilisation, but not a   scan here
 industries and assert leverage in negotiations with   preserve both production and trade credibility.  resolution. Exporters on both sides must remain
 Brussels.  cautious in long-term planning until the final
           implementation details are clearer.


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