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Dairy Unites Against Mexico Border Closing as President Backs Away From Trade Threat

April 10, 2019

A proposal from President Donald Trump to close the U. S. southern border with Mexico spurred a united dairy front as NMPF, member cooperatives and other groups including the U.S. Dairy Export Council spoke out against the concept. The effort added crucial agricultural voices to a torrent of criticism against the plan, after which the president said he would delay any closure and pursue other ways to punish Mexico for what he considers lax border enforcement.

A border closing would cut off U.S. milk-producer access to its largest dairy export market. While the President has postponed further action on a full closure for now, reports indicate that trade is being impacted by a slowdown in the processing of goods crossing the border due to the reassignment of some CBP staff from trade to immigration responsibilities.

“The dairy industry is suffering through one of its worst economic periods ever,” said Jim Mulhern, president and CEO of the National Milk Producers Federation (NMPF). “Low milk prices are already creating hardship for farmers, and further supply disruptions would only prolong producer difficulties.” More than seven dairy farms close each day in the United States, according to data from the USDA.

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

NMPF member cooperatives, including Dairy Farmers of America, FarmFirst Dairy Cooperative and United Dairymen of Arizona, also spoke out against the proposal, expressing concerns shared by other agriculture sectors that also rely on exports to prosper.

Mexico is U.S. dairy’s largest export customer, purchasing $1.4 billion in 2018. A border closing would jeopardize $3.8 million of U.S. dairy products that travel each day to Mexico, which is the largest customer for U.S. milk powder, cheese and butterfat. 2018 was a record year for U.S. sales of nonfat dry milk/skim milk powder and butterfat to Mexico, while milk-protein concentrate sales reached a 10-year high.

Every $1 of U.S. dairy exports to Mexico generates $2.50 of economic activity in the United States, according to a study by Informa Economics.