Dairy Groups See Opportunity In Global Trade Developments

HART Insight Summary

Recent trade developments involving India and the upcoming 2026 review of the United States-Mexico-Canada Agreement (USMCA) could influence export opportunities for U.S. dairy processors. A newly announced U.S.–India trade agreement may lead to lower tariffs and expanded market access, while industry groups are simultaneously preparing for formal USMCA review discussions aimed at addressing unresolved dairy market barriers.

Predicting the future for dairy

Dairy organizations including IDFA, NMPF, and USDEC are actively engaging policymakers to strengthen export conditions, particularly regarding Canadian tariff-rate quotas and Mexico’s recognition of common cheese names. With nearly half of U.S. dairy export value tied to Canada and Mexico, these negotiations carry significant implications for dairy manufacturers, exporters, and farm income stability.

Key Takeaways

• A new U.S.–India trade agreement may reduce tariffs and remove non-tariff barriers, potentially expanding export opportunities.
• U.S. dairy groups are advocating for stronger enforcement and renewal of USMCA during its 2026 joint review.
• Canada’s administration of dairy tariff-rate quotas remains a central concern for U.S. exporters.
• Mexico’s commitments regarding common cheese names continue to be a priority for industry groups.
• Canada and Mexico account for approximately 44% of total U.S. dairy export value.

At A Glance

Estimated Reading Time: 4 minutes
Original Publish Date: February 2026
Source: Cheese Market News

Original Article

U.S. dairy industry groups have been working with government officials to ensure the most recent global trade developments yield additional market opportunities for dairy exporters.

Earlier this week, President Trump announced on social media that after speaking with Indian Prime Minister Narendra Modi, a trade deal had been reached that would lower tariffs and remove nontariff barriers.

“Out of friendship and respect for Prime Minister Modi and, as per his request, effective immediately, we agreed to a Trade Deal between the United States and India, whereby the United States will charge a reduced Reciprocal Tariff, lowering it from 25% to 18%,” Trump posted on Monday on Truth Social. “They will likewise move forward to reduce their Tariffs and Non-Tariff Barriers against the United States, to ZERO. The Prime Minister also committed to ‘BUY AMERICAN,’ at a much higher level, in addition to over $500 BILLION DOLLARS of U.S. Energy, Technology, Agricultural, Coal, and many other products. Our amazing relationship with India will be even stronger going forward.”

Modi thanked Trump in a post on X later that day, confirming that the U.S. tariff on products from India had been reduced to 18%.

“When two large economies and the world’s largest democracies work together, it benefits our people and unlocks immense opportunities for mutually beneficial cooperation,” Modi added.

The International Dairy Foods Association (IDFA) applauded this announcement, noting that for years IDFA has been working with the U.S. government to support a positive agriculture trade relationship with India. As the United States continues constructive discussions with the Indian government on a range of agricultural trade issues, IDFA says it remains supportive of improving the bilateral relationship, facilitating greater understanding of each country’s needs and concluding the negotiations.

“IDFA supports a stronger U.S.-India trade relationship and is grateful to President Trump and his administration as well as the government of India for working toward that common goal,” says Michael Dykes, president and CEO, IDFA.

Meanwhile, IDFA, the National Milk Producers Federation (NMPF) and U.S. Dairy Export Council (USDEC) are among 40 farm and agricultural groups that yesterday launched the Agricultural Coalition for the United States-Mexico-Canada Agreement (USMCA), an industrywide effort to support the strengthening and renewal of USMCA.

USMCA, which replaced the North American Free Trade Agreement (NAFTA) in 2020, mandates a “joint review” in 2026, which allows the countries to consider potential changes to the agreement.

Since the stakeholder engagement process began in October 2025, the U.S. dairy industry has spoken to the importance of the agreement while stressing that certain critical shortcomings must be addressed.

“USMCA has helped grow vital export opportunities that support dairy farm incomes across the country. Unfortunately, Canada has clearly not upheld their end of the deal and Mexico needs to fully implement USMCA commitments to respect our use of common cheese names. We look forward to working with the administration during the review to ensure our trading partners honor their commitments so the agreement can best deliver for dairy farmers,” says Gregg Doud, president and CEO of NMPF.

“USMCA has been critical to maintaining strong export demand for U.S. dairy farmers, manufacturers and exporters, providing greater opportunities in the Mexican market in particular,” says Krysta Harden, president and CEO of USDEC. “At the same time, persistent market access barriers, particularly in Canada, limit the full potential of the agreement and must be addressed to ensure that U.S. dairy exporters receive the benefits they were promised.”

The U.S. dairy industry exported about $3.6 billion in dairy products to Canada and Mexico in 2024, which accounts for about 44 percent of total export value. At the same time, USMCA has fallen short in certain key areas, according to USDEC and NMPF.

The groups note they will continue to fight for several priorities in the review, including through the new coalition, such as:

• Combatting Canada’s continued manipulation of its administration of dairy tariff-rate quotas, denying U.S. exporters the meaningful market access guaranteed under USMCA.
• Tackling Canada’s circumvention of USMCA dairy protein export disciplines.
• Ensuring that Mexico upholds its USMCA commitments to protect common cheese names such as “feta.”

HART Perspective

Trade policy remains one of the most significant external variables affecting dairy processing strategy. With nearly half of U.S. dairy export value concentrated in Canada and Mexico, the 2026 USMCA review introduces both risk and opportunity for processors reliant on export markets.

Improved tariff alignment with India could open incremental opportunities, particularly for value-added dairy ingredients and specialty cheeses. At the same time, unresolved access barriers in North America highlight the importance of diversified export planning and operational flexibility.

For processors, trade developments affect production forecasting, capital investment timing, product‑mix planning, and long‑term capacity decisions. While policy negotiations evolve, maintaining scalable systems and adaptable production lines remains essential to managing export volatility.

What This Means for Dairy & Cheese Processors

• Export exposure to Canada and Mexico continues to be a material factor in production planning.
• Policy shifts may affect demand forecasts, pricing strategy, and capacity utilization.
• Market access barriers can influence product mix and labeling decisions, particularly for cheeses with common names.
• Diversified export strategies may help mitigate geopolitical and regulatory risk.
• Flexible processing systems support faster adaptation to shifting global demand conditions.

Attribution

This article references industry reporting and data originally published by Cheese Market News. HART Design & Manufacturing has added independent analysis and dairy-processing context. The original publishers did not contribute to or review these additions.

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Source: Cheese Market News