It was a difficult 2018 for dairy farmers, in part because of President Trump’s trade disputes with Canada, Mexico and China.
With all the tariffs affecting regular trade, there is a surplus of dairy products in the US that are normally sold overseas, leaving milk prices at an all-time low. The entire US agriculture industry is feeling the consequences of this at some level.
According to the ADC, “milk price has dropped nearly 40% over the last 4 years. Cheese exports from the US to Mexico are down more than 10% annually and shipments to China have fallen almost 65% annually.”
A temporary fix
In August, the USDA announced a plan to purchase $1.2bn of food from US farmers as an emergency aid package to mitigate the effects of tariff fluctuations. About $85m of that was allocated for dairy, and most in the industry were not impressed.
It was seen by many as an insufficient temporary fix. In October, the National Milk Producers Federation (NMPF) wrote a letter to US Agriculture Secretary Sonny Perdue, asking him to better calculate the loss farmers are experiencing before it announces any more aid packages. The letter estimated that dairy farmers would lose $1.5bn in revenue in the second half of 2018 alone, a far cry from $85m.
This came at the same time that Trump announced he was dismantling the North American Free Trade Agreement (NAFTA) without an immediate deal to replace it.
The Trump Administration has since signed a revised US Mexico Canada Agreement (USMCA) that is seen as a good deal for US farmers and a bad one for Canadian farmers, with Canadians believing Prime Minister Justin Trudeau gave into Trump’s aggressive tactics and betrayed Canada’s agriculture industry.
Jump starting the industry
But the doubt is back among US farmers, reflected clearly in the ADC’s letter. It starts off describing the financial pain felt by workers: “Many of us feel helpless and we struggle to support our families — some have even required food stamps to put food on their tables.”
It lists the price fluctuations, costly dairy regulations and a shortage of workers as reason for the crisis, then explains the surplus cheese situation and how to fix it.
There is 1.4 billion pounds of cheese sitting in cold storage facilities throughout the US, and the ADC believes that “with the price of milk at a record low, it is necessary that this surplus be liquidated to jump start the industry.”
The ADC suggests sharing the surplus cheese with the 40m Americans struggling with hunger and food insecurity. The liquidation would also support the nearly 3m workers in the US dairy products industry.
The letter closes with a request for the public and others in the industry to also contact the administration and make their feelings known:
“The American Dairy Coalition is encouraging everyone to spread the word by reaching out to their legislators asking them to work with President Trump and stop the hemorrhaging of the US dairy industry.”