Early Bird I Tuesday April 15th 2025

Global Dairy Trade auction expected to reveal early impacts of US trade war, Associate Health Minister hits the road to hear rural health concerns, and critical foot and mouth vote opens this week.

Welcome to Proud Country's Early Bird - The top things you need to know that impact rural New Zealand delivered to you by 5am, because who doesn’t need better chat beyond the weather!

 

Global Dairy Trade auction expected to reveal early impacts of US trade war

This week's Global Dairy Trade auction will be closely watched as the first major test of how Donald Trump's tariff moves might impact dairy prices. With nearly two weeks passing since the US President imposed a wide range of tariffs sending markets into turmoil, New Zealand's dairy sector is particularly concerned about effects on China, our largest dairy buyer.

A Chinese dairy industry source indicates that while general demand might remain stable, the greater concern is the potential pressure on Chinese consumer confidence if trade tensions continue. Chinese leadership is reportedly meeting to devise plans to boost their economy and stabilise markets in response to the situation.

New Zealand exported $980 million worth of dairy products to the United States in the year to December, with most of Fonterra's US business focused on value-added protein ingredients including caseins and various protein concentrates. The average US tariff on dairy products was already 19.6% before the recent changes.

Fonterra is currently working to understand the direct impact of the 10% tariffs on their business, including determining exactly who pays the tariff in each case and how it affects customer relationships.

 

Southland's diverse export mix provides buffer against US tariffs

Southland exporters are adopting a measured approach to the United States' new tariff regime, with many businesses confident the region faces less exposure than other parts of New Zealand.

Export Southland chairman Jamie May highlights that only a small portion of the region's container trade heads to American markets. While dairy products, meat, pebbles, pet food, processed forestry products and aluminium make up the main exports to the US, these represent relatively small volumes of Southland's overall export portfolio.

The greater concern for local exporters centers on potential secondary effects - whether tariff-driven inflation might trigger broader economic slowdowns across New Zealand's trading partners. Some shipping companies are hesitant about having products already en route to the US that could suddenly face changed conditions. However, May notes the disruption could create opportunities for Southland if American buyers shift away from heavily tariffed competing nations.

The timber sector appears particularly insulated, with companies like Niagara continuing normal operations. The industry has largely avoided tariff impacts, likely due to America's limited domestic timber manufacturing capacity. 

 Alliance Group reports steady buyer interest despite the uncertainty, with American beef demand remaining robust due to domestic shortages. The company is monitoring potential market shifts but currently maintains strong sales momentum.

Fonterra, which primarily exports specialized dairy protein ingredients to the US, emphasizes the importance of maintaining the international rules-based trading system during this period of heightened protectionism. The company's protein concentrates and casein products supply American manufacturers of nutritional products for both domestic and global markets.

 

Associate Health Minister hits the road to hear rural health concerns

Associate Health Minister Matt Doocey is launching a Rural Health Roadshow to hear directly from rural communities