Could tariffs put U.S. dairy exports at risk? In this episode of The Milk Check, special guest Mike McCully, President of The McCully Group, joins us to slice through the uncertainty in today’s dairy market.

With trade tensions rising, could tariffs spook global buyers and push them toward alternative markets? We tackle some of the biggest questions facing dairy exporters today, including:

Will tariffs curdle U.S. dairy exports?

How are Mexico and China adjusting their buying strategies?

What happens if tariffs push global buyers to look elsewhere?

Listen now to the latest episode of The Milk Check to learn what's making waves in the dairy markets.

Special Guest:

Mike McCully, The McCully Group

The Jacoby Panel:

Diego Carvallo

Jacob Menge

Josh White

Miguel Aragón

Ted Jacoby, III

Yara Morales

Intro (with music)

Welcome to The Milk Check, a podcast from T.C. Jacoby & Company where we share market insights and analysis with dairy farmers in mind.

Ted Jacoby, III:

Welcome everybody to The Milk Check. So, today, our topic is going to be tariffs and how that might affect the U.S. dairy industry. We are recording this at 2:00 PM on Friday, February 7th, and we're going to talk about tariffs. Very likely, by the time you listen to this, it might all be irrelevant because who knows what the Trump administration is going to do next? Joining us today from our team is Miguel Aragon, our Director of Latin America's Sales for Cheese; Yara Morales, our Director of International Sales for Dairy Ingredients; Diego Carvallo, our Head of International Trading for our Dairy Ingredients Team; and Josh White, the Head of our Dairy Ingredients Team. Also, Brianne Breed is joining us, Head of our Cheese Team, and Jacob Menge, Head of our Risk Management and Trading Strategy. In addition to that illustrious group, we've got Mike McCully today, the founder of the McCulley Group, who is probably well known to most everybody in the dairy industry, at least in North America. Mike, thanks for joining us today.

Mike McCully:

You're very welcome. Happy to be here.

Ted Jacoby, III:

Mike, where do we stand right now on tariffs, what is the Trump administration doing, and what do we expect them to do next?

Mike McCully:

Had a very different conversation just a week ago when it looked like we were going to start on February 1st with tariffs on Mexico and Canada and retaliation from both countries and then China. But then, 48 to 72 hours, all of it got put on hold. The China retaliation was not on dairy; Canada and Mexico were on hold, so we've basically put all that tariff discussion over in a box, and we're just going to sit and wait here for a while. It's evolving each day. I read something yesterday or the day before: "The best tariffs are ones that are not used." Hopefully, that's where things go, but we'll just have to wait and see. Between this and H5N1 are two very unpredictable elements that we have to deal with in the dairy market, not just this week and next week, but probably for quite some time.

Ted Jacoby, III:

I couldn't agree with you more on that one. Jake, are we expecting anything to happen next in terms of tariffs?

Jacob Menge:

I think something is happening as we speak. Trump talked this morning about, in his own words, reciprocal tariffs on unnamed countries. That is new as of this Friday. Trump and tariffs seem to have a cadence of news on Friday, which Wall Street really loves. That's certainly new. I heard him mention Japan, I think today. So that is just wreaking havoc on equity markets and our markets. It's this unknown. Markets just hate the unknown, and much of it is hanging out there.

Ted Jacoby, III:

Where we stand regarding tariffs, we've postponed putting tariffs on Mexico and Canada or any, let's call it additional tariffs, the 25% tariffs, we've delayed for about a month, the possible 25% tariffs on those countries.