Dairy concerned by Trump Mexican border closure threats

By Beth Newhart contact

- Last updated on GMT

"Closing the US southern border to Mexico would be a gut punch that could set the industry back by a decade or two." Pic: Getty/Bet_Noire
"Closing the US southern border to Mexico would be a gut punch that could set the industry back by a decade or two." Pic: Getty/Bet_Noire

Related tags: Trade, tariff, Mexico, Dairy farmers

Last week President Donald Trump announced plans to close the southern US border, effectively ending trade with Mexico. He has since changed his mind and now given Mexico ‘a one-year warning’ with further threats of tariffs.

President Trump has been waging trade wars with some of the US’ biggest partners since he took office in 2017. He has gone back and forth on retaliatory tariffs with China, and dismantled NAFTA following arguments with Canada and Mexico.

Throughout his presidency, Trump has also been vocal about perceived problems at the US-Mexico border, including illegal immigrants and drugs coming into the US. Last week he announced his intent to close the border within days, causing immediate backlash.

On April 4 Trump said he would not immediately close the border. Instead, he said Mexico has “a one-year warning, and if the drugs don’t stop, or largely stop, we’re going to put tariffs on Mexico and products, in particular cars … and if that doesn’t stop the drugs, we close the border.”

He has not acknowledged the impact a border closure would have on key US markets, but said, “let me just give you a little secret, security is more important to me than trade.”

US dairy groups were quick to rebuke Trump’s comments, saying it would “send shock waves”​ through the market. In 2018, Mexico purchased $1.4bn worth of US dairy products, and a record 15.8% of US milk production was exported. Sales of dairy exports have increased by more than 600% since 1995.

Dairy farmers as a bargaining chip

Jim Mulhern, president and CEO of the National Milk Producers Federation, said, “The dairy industry is suffering through one of its worst economic periods ever,”​ citing USDA data that more than seven dairy farms close every day in the US.

"Low milk prices are already creating hardship for farmers, and further supply disruptions would only prolong producer difficulties."

Tom Vilsack, president and CEO of the US Dairy Export Council, said, “Dairy exporters already are suffering from diminished access to export markets due to high tariffs and lack of progress on US trade agreements. Closing the US southern border to Mexico would be a gut punch that could set the industry back by a decade or two."

"There is not a ready alternative market for the millions of gallons of milk that are converted into the thousands of tons of dairy ingredients and cheese we ship to Mexico. We cannot condone limiting access to food as a bargaining chip in solving immigration issues."

Rick Smith, president and CEO of Dairy Farmers of America, said, “The dairy industry has worked together closely for more than two decades to grow and strengthen the market for US dairy products in Mexico. In the volatile dairy industry, strong dairy export markets are crucial for our farmer-owners, who have suffered years of financial stress on the farm.

“We are in the worst rural economic recession since the 1980s. Our farmer-owners need strong dairy markets, both at home and abroad to recover and continue providing wholesome dairy products for generations to come. The Mexican export market is critical to the longevity of our industry.”

Jeff Lyon, general manager at FarmFirst Dairy Cooperative, said, “Closing the border with Mexico will leave a devastating impact on dairy farmers across the US, a relationship that was painstakingly built over the past several years by industry organizations.”

“For dairy farmers struggling to manage through these very tough economic times, this may be their worst blow yet, even with the past four years of low milk prices. In no way should US dairy farmers be the bargaining piece for these immigration issues.”

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