The National Milk Producers Federation this week asked the Department of Agriculture to better support dairy farmers who are experiencing losses stemming from the Trump trade agenda. The Federation says in a letter to USDA that the agency needs to better reflect the dairy-farm incomes lost to tariff retaliation when it calculates its next round of trade mitigation payments.
NMPF Chairman and dairy farmer Randy Mooney cited four studies illustrating that milk producers have experienced more than $1 billion in lost income since May, when the retaliatory tariffs were first placed on dairy goods in response to U.S. levies on foreign products. In contrast, the first round of USDA trade mitigation payments, announced in August, allocated only $127 million to dairy farmers. The expected impact of the retaliation may result in roughly $1.5 billion in lost revenue for producers during the second half of 2018.
The Federal Reserve Bank says that USMCA, the North American Free Trade Agreement replacement, will not benefit dairy farmers. A report by the Federal Reserve says gains made by the new U.S.-Mexico-Canada Agreement that will replace NAFTA are “too small and too far in the future to help dairy farmers.” The Minneapolis Fed reported that “a substantial number of dairy operations have exited the business since the beginning of the year,” according to CNBC.
Dairy was a fixture of the NAFTA renegotiation effort as concessions from Canada were long-sought by President Donald Trump. Before the new agreement, U.S. dairy farmers faced strict import quotas and tariffs. Under the new agreement, which still needs congressional approval, Canada agreed to drop restrictions, allowing U.S. producers to supply up to 3.6 percent of Canada’s dairy market.
Source: NAFB News Service