IFA President Joe Healy said that every effort must be made to try and avoid the US applying the proposed tariffs, but the risk of US tariffs was already priced into international dairy market trends.
He said it was typical of the type of trade disputes currently distracting dairy market sentiment in spite of a solid global supply and demand balance proven by firmer international dairy commodity prices and a second positive Global Dairy Trade price trend earlier this week.
While such proposed tariffs are undoubtedly concerning, they are not unexpected and industry has had the opportunity to take some measures to soften the potential impact.
“We understand dairy exporters have made every effort to store additional product in the US ahead of tariffs, which will mitigate some of the impact. However, every effort must be made by the EU and the Irish Government between now and the WTO meeting later this month to try and resolve this matter through negotiation,” he said.
IFA Dairy Chairman Tom Phelan said, “We have grown our exports of Kerrygold branded butter and cheese to the US to over 34,000t in the last decade. Kerrygold butter is now the second highest selling butter brand in the USA, and some other Irish exporters have entered the market in recent times. These are high value consumer products, and command a significant price premium on the market place, delivering strong margins to our sector”.
“These tariffs have the potential to reduce margins or market share or both. The EU and Irish Government must make every effort to negotiate our way back to normal trade flows. WTO-approved tariff impositions are only ever for limited time periods, but coming in the shadows of Brexit, this is a serious concern for farmers and processors alike,” he concluded.