The Strait of Hormuz: What the Iran Conflict Means for Dairy Trade

What happens to dairy markets when one of the world’s busiest shipping lanes suddenly gets disrupted?

With the Strait of Hormuz under pressure and trade routes across the Persian Gulf in question, exporters are scrambling to figure out how to move product. What does all this mean for global dairy demand?

In this episode of The Milk Check, host Ted Jacoby III sits down with the Jacoby trading team to talk through what happens when geopolitics collides with global dairy trade.

We dig into:

How exporters may reroute product through alternate ports like Jeddah

Why trade flows could shift between the U.S., Europe, Oceania and Southeast Asia

How energy prices and freight disruptions could ripple through dairy markets

Whether this disruption boosts demand in the short term or destroys it if it drags on

Find out how one shipping lane could reshape the global dairy trade. Listen to The Milk Check episode 95: The Strait of Hormuz: What the Iran Conflict Means for Dairy Trade.

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Ask The Milk Check

Ted Jacoby III: [00:00:00] Coming up on The Milk Check.

The Strait of Hormuz is closed. The port of Dammam is closed.

Joe Maixner: There's definitely product that's stuck, can't get to its destination.

Ted Jacoby III: Welcome to the Milk Check from T.C. Jacoby and Company, your complete guide to dairy markets, from the milking parlor to the supermarket shelf. I'm Ted Jacoby. Let's dive in.

Today we're gonna talk about what's going on in the dairy market, specifically global trade. We're recording this on March 6th, 2026, and seven days ago the U.S. bombed Iran.

As we [00:00:30] speak, the Strait of Hormuz is closed. The port of Dammam is closed, and trade flows are getting rearranged as we speak. Today with me, we have Joe Maixner, head of our butter trading book. We have Josh White, we have Diego Carvallo, and we have Mike Brown. And we thought it would be appropriate to discuss what's going on in the Middle East, specifically how it's affecting the dairy industry, and what its short-term and long-term effects will be on dairy demand.

We're gonna start with Joe. Joe, what are you hearing out there right [00:01:00] now?

Joe Maixner: There's definitely product that's stuck, can't get to its destination. Both going into Port of Dammam and other Middle Eastern ports for that matter. With butter's moves over the past year, the Middle East market had been probably the largest growth opportunity for us in global exports for butter. Fortunately, this all happened after the rush for Ramadan to get everything in. So, I would say that it's not as bad as it could be right now, but there is certainly product that's stuck on the water looking for [00:01:30] alternative options to get to land.

And there's quite a bit of product that still is waiting to leave the U.S. that we're not quite sure if and when it will actually leave. A lot of it's still up in the air. Nobody really knows, what to do yet. I think it's still too early to tell. Nothing's been canceled per se, but the longer that this drags on, we're certainly going to have some effects from it.

Ted Jacoby III: There's a lot of talk that maybe this war is gonna be a five to six week war. If the Strait of Hormuz is closed for five to six weeks, as is the [00:02:00] Port of Dammam, is that enough to cancel orders? Is that too long?

Joe Maixner: I would say it should probably cancel some orders. I wouldn't say it would cancel everything, but they're gonna have to get product at some point from somewhere, They can't completely stop. People are gonna have to eat. Production will still have to continue, and they're gonna have to source product from somebody.

And if we can't get it there, they'll find it from somewhere else.

Ted Jacoby III: I'm hearing that one of the things that they're exploring is shipping