In a major milestone for the farmer-managed export assistance program, Cooperatives Working Together (CWT) has helped its member dairy cooperatives export over 1 billion pounds worth of milk so far in 2018. That sum represents 50 percent of the overall rise in U.S. milk production through August of this year.

“This is a huge milestone, not just for the members of CWT, but also for the wider U.S. dairy industry,” said Jim Mulhern, president and CEO of NMPF. “CWT’s success at ensuring nutritious dairy products reach customers all over the world demonstrates the importance of dairy cooperatives coming together to build a better economic future for our dairy community.”

Founded in 2002, CWT is a voluntary membership program funded by contributions from NMPF’s member cooperatives and more than 100 individual farmers. The funds raised from the CWT membership fee of $0.04/cwt. help maintain U.S. exports in an increasingly competitive world market.

Mulhern noted that “with milk production rising around the world, as well as in the United States, CWT helps maintain and build market share for our products as we tap into growing consumer demand across the globe for made-in-America dairy products.”

In August, CWT helped its member cooperatives to secure 48 contracts to sell 3.229 million pounds of American-type cheeses, 877,440 pounds of butter and 14.76 million pounds of whole milk powder to customers in Asia, Central America, the Middle East, North Africa, Oceania and South America. The product will be shipped to buyers in 11 countries in four regions of the world during the months of August 2018 through March 2019.

These contracts bring the 2018 total of CWT-assisted product sales to 46.68 million pounds of cheese, 12.96 million pounds of butter, and 41.44 million pounds of whole milk powder. These transactions will help CWT’s members sell a total of 1.043 billion pounds of milk, on a milkfat basis.

Assisting CWT member cooperatives gain and maintain world market share through the Export Assistance program expands the long-term demand for U.S. dairy products and the U.S. farm milk that produces them. This, in turn, positively impacts all U.S. dairy farmers by strengthening and maintaining the value of dairy products that directly impact their milk price.

The amounts of dairy products and related milk volumes reflect current contracts for delivery, not completed export volumes. CWT will pay export assistance to the bidders only when export and delivery of the product is verified by the submission of the required documentation.

All cooperatives and dairy farmers are encouraged to add their support to this important program. Membership forms are available online.

The July monthly margin under the Margin Protection Program (MPP) was $6.72/cwt., $0.65/cwt. lower than the June margin, owing mostly to lower milk prices. The July all-milk price was $15.40/cwt., $0.90 lower than in June, as the full effect of the retaliatory tariffs imposed by Mexico and China on various U.S. dairy imports rippled through U.S. domestic markets. The July MPP feed cost formula was $0.25/cwt. lower than the month before. Most of the drop in the monthly feed cost was split evenly between lower corn and lower soybean meal prices, when calculated on a per-hundredweight-of-milk basis.

Dairy farmers who signed up for $8.00 margin coverage at the lower, Tier 1 premium cost will receive a net return of $0.43/cwt. – after payment of premiums and sequestration reduction of payments – on their covered milk production for all of 2018, based on USDA’s MPP Decision Tool forecast calculated using the Aug. 28 CME dairy and grain futures settlement prices, shown in the graph.

USDA’s MPP margin forecasts can be accessed online. NMPF’s Future for Dairy website offers a variety of educational resources to help farmers make better use of the program.

The Senate and the U.S. House of Representatives have returned to Capitol Hill from their August recess to tackle several pressing matters before adjourning again for the fall campaign season.

Funding for government agencies is set to expire when the fiscal year ends on Sept. 30.  To avoid a government shutdown, Congress must pass a continuing budget resolution to extend current spending levels into the expected post-election lame duck session of Congress. However, the two chambers may complete work in the coming weeks on several appropriations measures for the 2019 fiscal year, lessening their workload after the November election.

September is a critical period for finalizing work on the 2018 Farm Bill, as the current five-year bill expires on Sept. 30. The joint House-Senate conference committee held its first official public meeting on Wednesday, Sept. 5, and leaders from both the House and Senate Agriculture Committee began meeting informally during last month’s summer recess, underscoring the urgency of the situation. NMPF has worked closely with Congress during the process, and is pleased that both the House and Senate dairy titles embody NMPF-backed dairy policy reforms.

Congress may also hold a vote on immigration legislation in September. NMPF has worked with House Judiciary Committee Chairman Bob Goodlatte (R-VA), House Agriculture Committee Chairman Mike Conaway (R-TX) and Ranking Member Collin Peterson (D-MN), as well as Rep. Dan Newhouse (R-WA), to advance the AG and Legal Workforce Act (H.R. 6417). This measure would create a new H-2C guest worker program for agricultural workers – including year-round dairy workers – coupled with new enforcement measures including E-Verify.  This legislation was introduced before the August recess, and NMPF has been working to build support for action on the measure in Congress yet this year.

The Trump Administration made major strides in recent weeks to finalize negotiations over a new North American Free Trade Agreement (NAFTA), but the biggest issue for America’s dairy farmers – whether they will earn more market access to Canada – remains unresolved in early September.  This high-stakes, high-visibility challenge is the key area where NMPF is heavily engaged this month on achieving a positive outcome for its members.

The White House in late August touted an agreement in principle with Mexico, although there are few public details about what the U.S.-Mexico portion of the new NAFTA includes. For instance, the U.S. announced that tariffs with Mexico on agricultural products will remain at zero; however, U.S. Trade Ambassador Robert Lighthizer indicated last month that the U.S. tariffs against Mexico metal imports remain in place, as do the retaliatory Mexican tariffs against U.S. dairy exports.  The U.S. dairy industry needs to see genuine duty-free trade restored with Mexico in order to safeguard market share to its top export customer.

Another critical issue is the extent to which the agreement with Mexico will prevent the European Union from monopolizing common cheese names sold in Mexico, which is what the E.U. is attempting to do in its separate free trade agreement with Mexico.  Given the importance of the Mexican dairy market to the U.S. industry – with $1.3 billion in sales last year alone, including $400 million in cheese exports – obtaining a positive outcome is a must.

After the Mexican accord was announced, the focus turned to completing an updated agreement with Canada. U.S. and Canadian negotiators will resume talks this week on the remaining issues in need of resolution, and dairy trade remains high atop that list, thanks to NMPF’s insistence that any free trade agreement with Canada must support increased market access. President Trump and his top advisors have been adamant in recent weeks that no agreement with Canada will be forthcoming if dairy issues are not successfully dealt with.

NMPF has insisted that Canada tear down duties that reach as high as 300 percent on dairy imports, and allow the U.S. dairy sector access to the type of deep and broad export opportunities in Canada that other U.S. agricultural commodities have long enjoyed.  At the same time, the revised NAFTA pact must eliminate the new Canadian Class 7 pricing system, which was designed to dispose of excess Canadian dairy products on world markets and to discourage the import of new U.S. dairy products that were not subjected to Canadian tariffs.

Completion of NAFTA, and with it, a resumption of trade and a cessation of tariffs, will help ease financial pressures on dairy farmers and allow the U.S. to push ahead with pursuing new trade agreements that can expand dairy exports.

Dairy farmers can now sign up for their share of the multi-billion-dollar trade assistance package developed by the U.S. Department of Agriculture (USDA), although the amount available in direct payments – just $127 million, or 12 cents per hundredweight on half of a farm’s annual production – falls far short of what NMPF had asked USDA to allocate.

Last month, USDA released details of the financial aid package intended to compensate farmers for depressed commodity prices created by the retaliatory tariffs imposed this summer by Mexico, China and other nations against U.S. farm exports.  The overall package includes direct payments, trade promotion assistance, and government purchasing programs for a variety of farm products.

Unfortunately, the USDA compensation “falls far short of addressing the losses dairy producers are experiencing due to trade retaliation resulting from the Trump Administration’s imposition of steel and aluminum tariffs,” said Jim Mulhern, NMPF president and CEO. “Although there may be a second direct aid package at the end of the year, dairy producers are greatly disappointed that the farmer aid portion of today’s trade relief package does not adequately address the harm done to dairy.”

The application for the USDA’s Market Facilitation Program, which can be found here, is one-page document that USDA estimates will take 30 minutes to complete. Dairy farms must have been in operation on June 1, 2018, to participate.

Dairy payments will be calculated based on 50 percent of a farm’s milk production history established through the Margin Protection Program.  If a farm hasn’t used the MPP, it must provide milk production records to the local county FSA office. The decision to offer payments on the other 50 percent of production will be made later this year. Details on the food product purchase and trade promotion programs are not yet available, other than that dairy purchases will be $85 million of the $1.2 billion in total acquisitions.

Although the U.S. government announced a tentative agreement with Mexico in August, on the same day as the release of the MFP details, tariffs against U.S. exports remain in place. Dairy farm income will fall $1.5 billion this year if retaliatory Mexican and Chinese tariffs on U.S. dairy exports continue, according to a study released by Informa Agribusiness Consulting on Aug. 28. That figure will grow to $16.6 billion by 2023 unless the higher tariffs are rolled back.

NMPF is regularly communicating with government officials about dairy’s reliance on trade – which now represents 15 percent of domestic production – as well as the need to be adequately compensated for losses considering the unique position dairy is in. NMPF is urging government officials to restore normal trading conditions with Mexico, negotiate a resolution with China to the tariff stand-off, and aggressively seek new opportunities to expand exports.

“Dairy farmers are particularly vulnerable to downward price swings because, unlike crop farmers who harvest once a season, dairy producers harvest and market their product daily,” Mulhern explained. “If farmer incomes continue to suffer as projected, we will lose more farms.”

Any attempt to mend an injury – however necessary – doesn’t often achieve a complete restoration of what’s been damaged. Repairs never quite return things to a “good as new” status. On a personal level, all of us have some scar tissue that demonstrates this truth.  From a broader, economic perspective, the various safety nets and policy remedies offered by the government – while important to many in agriculture – can’t fully replace the loss of markets and income.

The latest example of this dynamic is the program the U.S. Department of Agriculture (USDA) created this summer to compensate dairy farmers for the revenue they’ve lost due to the retaliatory tariffs imposed by Mexico and China.  Farm-level milk prices had just started their seasonal and expected upward movement this spring, but cash and futures prices did an abrupt about-face once tariffs were announced on exports to our top two foreign markets.  NMPF calculated that farmers’ milk prices took a hit of $1.65/cwt., which if conditions don’t fully improve, will deprive them of $1.8 billion in projected revenue in the last half of 2018.  That’s a very deep wound, compounded by an already challenging market situation.

To its credit, USDA acknowledged that the ongoing tariff conflicts affect farmers of many different commodities, and announced efforts to provide compensation.  NMPF told USDA that the remedy should center on direct payments to producers and incorporate assistance to exporters facing a reduction in sales.  When the department announced its tariff mitigation package last month, the good news was that the agency followed the suggestions we provided in terms of how to administer the aid.  But the very bad news for dairy farmers is that the amount of aid – $127 million in direct payments – is a tiny bandage atop a very deep wound.

The $0.12/cwt. payment – that’s only a penny per gallon – amounts to less than one-tenth of the lost revenue caused by the downturn in markets.  Although we knew, based on conversations with senior USDA officials in recent weeks, that the aid package was likely to be significantly smaller in size than the initial forecast, the actual result is a deep disappointment.  It certainly pales in comparison to the damage that dairy farmers continue to suffer.

We have been clear with USDA that dairy farmers are not satisfied with compensation that falls significantly short of where markets were headed earlier this summer, based on all major analytical forecasts prior to the announcement of the retaliatory tariffs. We will continue to share our misgivings with administration officials and our allies on Capitol Hill.

As the USDA announced the tariff mitigation package, we also saw significant progress on the underlying source of the retaliatory tariffs: the strained trade relationship with Mexico. On the same day the farm assistance package was announced, the Trump Administration also touted an agreement in principle with Mexico on an updated deal over the North American Free Trade Agreement (NAFTA).  While that’s good news overall, there are some important details that remain unresolved, especially Mexico’s treatment of cheeses made in the United States and sold in Mexico. What’s more, the agreement did not include lifting the 20%-25% tariffs on our dairy exports to Mexico, tariffs that are harming farm prices in the United States.

An important aspect of the accord with Mexico is that it puts new pressure on Canada to wrap up NAFTA issues. That conversation now centers on removing the Canadian policies that both hurt U.S. dairy exports on the world market through the Class 7 dumping program, and severely limit U.S. dairy market access north of the border.  Top officials in the Trump Administration have repeated their insistence – in strong support of NMPF’s assertions over the past year – that any successful NAFTA outcome must create more trade opportunities for the U.S. dairy sector, and not allow Canada to continue engaging in flagrantly anti-competitive practices.  The high profile of U.S. dairy exports within the larger overall NAFTA discussion is a credit to the steadfast efforts that NMPF, working together with the U.S. Dairy Export Council and the International Dairy Foods Association, has engaged in during the past year to ensure our industry’s voice is heard and heeded, above all the other interests focused on the NAFTA talks.

Meanwhile, the Farm Bill negotiations continued during the late summer, and have kicked into high gear in September, with the goal of getting a new bill passed by the end of this month.  The slight differences in the dairy policy elements of the House and Senate versions of the bill should be fairly easily reconciled, and the final product will give America’s milk producers a better and more effective safety net than was established in the 2014 bill.

Of course, the reality is that, at best, the Farm Bill can only offer a modest back stop for agricultural producers.  The same is true of this summer’s trade assistance package.  The real driver of the future health of our industry is expanding existing markets – at home and abroad – and building new ones. In addition to revising NAFTA, we need to create new agreements with other nations to reach more consumers around the world with our foods. Opportunities for new growth are the best medicine for the afflictions farmers have suffered this year.

From NMPF President and CEO Jim Mulhern

ARLINGTON, VA – “Today’s announcement by the U.S. Department of Agriculture (USDA) on its tariff mitigation plan falls far short of addressing the losses dairy producers are experiencing due to trade retaliation resulting from the Trump Administration’s imposition of steel and aluminum tariffs.

“The dairy-specific financial assistance package provided by USDA – centered on an estimated $127 million in direct payments – represents less than 10 percent of American dairy farmers’ losses caused by the retaliatory tariffs imposed by both Mexico and China.

“The price drop resulting from these tariffs has not been gradual – it’s hurting U.S. dairy producers right now and will continue to do so. Since the retaliatory tariffs were announced in late May, milk futures prices have lost over $1.2 billion through December 2018. Milk prices for the balance of the year are now expected to be $1.10-per-hundredweight lower than were estimated just prior to the imposition of the tariffs on U.S. dairy exports.

“In addition, a new study by Informa Economics on the impact of the retaliatory dairy tariffs projects dairy farmer income will take a hit of $1.5 billion this year if the tariffs remain in place through the end of 2018. This loss compounds to $16.6 billion if the tariffs are left in place long term over the next five years, through 2023. The impact of lost sales to China account for most of that harm, accounting for 73 percent of the total. That sizable decline in farmer incomes will compound the low prices and financial losses that dairies have already felt.

“Dairy farmers are particularly vulnerable to downward price swings because, unlike crop farmers who harvest once a season, dairy producers harvest and market their product daily. If farmer incomes continue to suffer as projected, we will lose more farms.

“We appreciate that USDA has been seeking ways to help producers weather these volatile economic times. The product purchase program and the Trade Promotion Program are important elements of the overall package, and we will continue working with the department to best accomplish our shared goals of supporting dairy farmers’ prices in light of the harm caused by retaliatory tariffs. Although there may be a second direct aid package at the end of the year, dairy producers are greatly disappointed that the farmer aid portion of today’s trade relief package does not adequately address the harm done to dairy.

“Given today’s other news that the Trump Administration has reached a trade deal with Mexico, we are repeating our request that the administration provide relief to farmers by restoring normal trading conditions so that our product exports to Mexico – as well as to China – are not penalized by retaliatory tariffs. In addition, we believe it’s essential that the administration also pursue the opening of new market access opportunities through trade agreements that expand U.S. dairy exports. Those steps on trade would pay meaningful dividends to our farmers.”

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The National Milk Producers Federation (NMPF), based in Arlington, VA, develops and carries out policies that advance the well-being of dairy producers and the cooperatives they own. The members of NMPF’s cooperatives produce most of the U.S. milk supply, making NMPF the voice of dairy producers on Capitol Hill and with government agencies. For more on NMPF’s activities, visit our website at www.nmpf.org.

The National Milk Producers Federation welcomed the announcement today by the U.S. Department of Agriculture that it will purchase $50 million worth of fluid milk for distribution to domestic food assistance programs – the first time the agency has bought milk for use in this manner.

The USDA said Tuesday that it will authorize the expenditure of $50 million in Section 32 funds to purchase a range of consumer-friendly milk varieties, including whole, 2 percent, 1 percent and skim.  The agency will purchase the milk from approved vendors, and distribute the product – an estimated 12-15 million gallons, depending on the prices agreed to by USDA and its suppliers – to food assistance organizations such as Feeding America. The USDA will be offering informational webinars to dairy companies that wish to sell milk to the agency through this donation program.

“We are pleased that USDA is now including fluid milk in the assortment of foods it is buying and donating, as milk is in high demand at food banks because of its unparalleled nutritional benefits,” said Jim Mulhern, president and CEO of NMPF.  “This effort will help more Americans meet their U.S. Dietary Guidelines recommended daily consumption of milk.  We appreciate this initial step and look forward to working with the department to continue building upon this effort.”

The Agriculture Department noted that this purchase is a separate action from the unfair trade practice mitigation program – announced July 24 by the agency – that will provide financial assistance to agricultural producers through a combination of product purchases, direct payments and trade promotion programs.  The USDA has yet to release any details about that effort, but the $12 billion budget for that assistance, coming from Section 5 of USDA’s spending authority, is distinct from the Section 32 funds being used for this new milk purchase program.

“NMPF has been sharing information with USDA about the best way to maximize the value of the farmer assistance program that will be implemented soon, and we are hopeful that the agency moves quickly to get resources in the hands of dairy farmers this fall,” Mulhern said.

The 2015 version of the Waters of the U.S. (WOTUS) rule must be permanently rescinded, and the prior version of the regulation re-codified, to provide certainty for dairy farmers, the National Milk Producers Federation (NMPF) said today.

In comments submitted to the U.S. Environmental Protection Agency (EPA) and the U.S. Army Corps of Engineers (ACE) Monday, NMPF outlined its support for both agencies’ proposal to repeal the current definition of WOTUS and rewrite it to reflect common-sense approaches to protecting the environment. In addition, NMPF joined numerous farm and food organizations to submit an additional 22 pages of comments that provided an extensive legal and technical assessment of what the two agencies did wrong three years ago in an attempt to update the regulation.

“Dairy farmers undertake extensive efforts to manage the natural resources that are critical to their livelihoods,” said NMPF President and CEO Jim Mulhern. “WOTUS must provide proper clarity on what falls under its jurisdiction so that farmers can better meet the industry’s shared commitment to clean water.”

In early 2017, the Trump Administration ordered a review of the WOTUS rule in response to concerns many farm groups had raised since the measure was finalized in 2015. Because the WOTUS regulation significantly expanded the EPA’s authority over waterways used by farmers for drainage and irrigation, the measure was challenged in a federal appeals court and ultimately put on hold.

“The 2015 Rule should be repealed and, for absolute clarity, done so permanently,” NMPF said. “We believe the 2015 rule failed to provide regulatory certainty and consistency and exceeded the Agencies’ legal authority under the [Clean Water Act].”  The Clean Water Act (CWA) of 1972 gave the federal government jurisdiction over navigable waters but left the regulation of non-navigable waters to the states. However, over the years, the federal government has continually and wrongfully expanded its authority over these non-navigable waters, according to NMPF.

NMPF said the two agencies need to apply the definitions of the WOTUS rule in ways that are consistent with recent Supreme Court decisions and long-standing farming practices. Re-codifying the regulations that existed before the 2015 rule was developed will provide continuity and certainty for dairy farmers, other regulated entities, states governments, agency staff, and the public, the comments said.

The EPA and ACE should proceed with a notice-and-comment rulemaking process, in which two agencies re-evaluate the definition of WOTUS. NMPF said this must be done to correct the 2015 rule’s lack of clarity on key terms, such as “adjacent,” “floodplain,” and “significant nexus.” Dairy producers must be able to understand what constitutes federally-regulated waters of the United States, so they can better manage water quality on their farms.

With the repeal docket now closed, it is likely that the 2015 rule will be repealed permanently. NMPF will now focus on suggesting modifications to the pre-2015 rule and how it can be changed to provide the necessary clarity and certainty.

To help maintain the important role that dairy foods play in the diets of young children, NMPF has been pushing back against misguided World Health Organization (WHO) policies that would discourage the consumption of dairy products by kids under age 3.

The WHO creates standards, rules and guidelines that influence the policies and views of countries all over the world. The WHO standards are utilized by the governments of many of U.S. dairy companies’ export customers, and also shape the development of U.S. policies and guidance impacting food and agriculture. NMPF is working with the U.S. Dairy Export Council (USDEC) to engage more deeply in these arenas and set the record straight against misleading claims about the proper role of dairy foods.

Last month, NMPF and USDEC sent a representative to the annual Codex Alimentarius Commission (CAC) meeting to guard against efforts to codify WHO guidance restricting the sharing of marketing information about dairy foods. Another key priority at that Codex meeting was ensuring that Codex’s independent role as the global scientific standard-setting body was upheld in the face of efforts by some to redirect its focus and approach.

In May, the World Health Assembly (WHA) – part of the WHO – considered a resolution that would have effectively discouraged the consumption of dairy products by children younger than age three. The United States government supported most of the resolution, which was primarily focused on the benefits of breast-feeding by infants, while fighting against text in the resolution intended to discourage the consumption of milk and other dairy products by young children ages one and two.

Unfortunately, those facts were missing from a news article in The New York Times that erroneously alleged U.S. government representatives pushed for a policy that was anti-breastfeeding. NMPF responded with a news release offering the truth: that there have been consistent, bipartisan efforts dating back to 2016 to direct WHO policies impacting dairy consumption by young children back toward ones supported by science.

To help set the record straight, NMPF also reached out to congressional offices and media outlets to refute the misinformation and supply facts about the U.S. dairy industry’s support for the American Academy of Pediatrics’ recommendations on breastfeeding until age one and providing dairy products to young children to support their healthy development.

NMPF will continue to defend the important role of dairy nutrition and push back against efforts to impose restrictions on dairy products that are unsupported by sound science.

Progress toward a successful renegotiation of the North American Free Trade Agreement (NAFTA) continues this summer, with NMPF reminding U.S. negotiators that Mexico – unlike Canada – has been a model for open dairy trade with the United States, and that no export market is more important to dairy farmers than that of our southern neighbor.

NMPF has consistently urged the Trump Administration to prioritize three items during trade talks with Mexico: Preserving existing market access, rolling back retaliatory tariffs, and beating back trade barriers in the form of common food name restrictions that the European Union (EU) is using to give itself an unfair advantage in its new free trade agreement with Mexico.

As U.S. trade negotiators close in on a deal, U.S. dairy producers are hopeful that restoring duty-free and open trade with Mexico will propel the industry to achieve future growth in the Mexican market, which continues to expand year after year.

NMPF and the U.S. Dairy Export Council (USDEC) recently outlined these issues in a submission to the House Ways and Means Subcommittee on Trade, explaining:

In Mexico, we have worked collaboratively with our industry colleagues to grow dairy demand, build relationships between buyers and suppliers, and improve the infrastructure needed to efficiently move product to market. As a result, U.S. dairy sales there have grown from just $200 million in 2002 to more than $1.3 billion last year. As of last year, U.S. dairy sales accounted for more than three-quarters of Mexican imports.

We are deeply concerned, however about the impact that Mexico’s 20 to 25 percent retaliatory tariffs on U.S. cheeses is having. America, which sold more than $400 million worth of cheese to Mexico, now risks losing sales to it biggest competitors in Europe. Mexico finalized a trade agreement with the European Union in late April that will increase Europe’s market access to Mexico and impose new restrictions on certain common-name cheese products from the United States.

Europe seeks to grab more and more of the Mexican market every day, which is why more than 60 dairy businesses sent the White House a letter on June 26 requesting that the President, “suspend Section 232 steel and aluminum tariffs on Mexican products until the NAFTA renegotiation is completed, particularly in light of Mexico’s willingness to constructively engage with U.S. negotiators.”

In addition, NMPF continues to work with the Trump Administration on other important NAFTA-related topics, including opening the closed Canadian dairy market and addressing Canada’s Class 7 pricing program that puts U.S. producers at a disadvantage.

As summed up in a letter from the industry to the Agriculture Department and U.S. Trade Representative at the start of August, “The free flow of goods is at the heart of the NAFTA agreement, and we believe obtaining market access gains in Canada and preserving market share in Mexico will go a long way to furthering that goal. As you continue your important work, we stand ready to assist you in any way needed.”

As the Trump Administration works to bring NAFTA 2.0 negotiations to a successful close, trading conditions with two of U.S. dairy’s top export markets – Mexico and China – remain tense as retaliatory tariffs continue to negatively affect American farmers and dairy manufacturers. To help mitigate the impact of those tariffs, the Trump Administration announced the outlines of a financial assistance program last month for dairy farmers and producers of other commodities that have lost export sales.

NMPF has been engaged in ongoing discussions with USDA about how to reduce the economic harm to farmers caused by trade disagreements between the United States and other nations. NMPF’s economic estimates indicate that these tariffs could cost U.S. dairy farmers $1.8 billion in reduced milk prices just through the remainder of this year, based on the decline in milk futures prices since the retaliatory tariffs were implemented.

On July 24, the U.S. Department of Agriculture (USDA) announced that it is preparing a $12 billion economic assistance program designed to help dairy farmers and other agricultural producers suffering from the effects of retaliatory tariffs imposed by Mexico, China and other key trading partners. The White House’s plan will use USDA’s authority to support farmers through a combination of direct payments, milk product purchases for distribution to feeding programs, and additional export development assistance. Further details about the exact nature of the relief measures will be unveiled by Labor Day, USDA officials said.

The plan includes several recommendations NMPF submitted to USDA in a letter sent earlier last month. “We thank the administration for incorporating our recommendations,” said NMPF President and CEO Jim Mulhern. “We will continue working with USDA on program details to achieve provisions that are efficient, cost-effective and equitable to farmers of all sizes in all regions.”

It is unclear the extent of the support that USDA will provide to farmers through direct payments.  Anything short of the amounts determined by NMPF will likely not be enough to compensate producers for their losses, according to NMPF.

NMPF has also told the administration that the ultimate goal should be to restore full access to the Mexican and Chinese dairy markets and to pursue new trade treaties, all of which are important to the industry’s global competitiveness. Mulhern noted that “greater export opportunities are the long-term solution to the current situation. This assistance should help offset some of the short-term damage, but we also need access to key markets and new trade deals that allow our farmers to reach customers in other nations,” Mulhern said.

NMPF has continued to convey this message to policy makers, raising the dairy sector’s concerns with Congress and with a variety of administration officials. NMPF also submitted a statement to the House Ways and Means Committee in response to its Trade Subcommittee hearing on the Effects of Tariffs on U.S. Agriculture and Rural Communities.

As members of Congress return to their home states during August recess, NMPF is helping co-ops and dairy farmers deliver a united message to lawmakers: We welcome the short-term aid, but we need to fix our trade relationships.