Tag: trade

Trade War with China Deepens, Worsening Economic Damage to Dairy

Posted on by Theresa Sweeney

U.S. negotiations with China faced a serious setback in May, pushing off the prospect of a resolution in long-running U.S. efforts to reform a myriad of Chinese policies that harm U.S. interests.

The new tariffs that took effect June 1 included hikes by China of tariffs on lactose and infant formula. Still, greater damage to dairy is coming from prolonging the standoff that’s deeply damaged U.S. dairy exports to one of the world’s largest dairy markets, crimping U.S. sales while competitors take advantage of the impasse.

Tariffs erected in 2018 have proven to be a catastrophic blow for the U.S. dairy industry in its third-biggest overseas market. China’s dairy imports grew by 13 percent in the first quarter of 2019 compared to the same period last year; over the same period U.S. dairy exports fell by more than 40 percent, reversing the 10 percent annual growth the U.S. had seen in the Chinese over the past decade. Resulting losses in U.S. dairy farm revenues may reach $4.8 billion by 2020.

Tariff Threat Avoided

Posted on by Theresa Sweeney

The importance of committing to solidifying dependable trading conditions with our biggest export market – Mexico – was driven home in early June as President Donald Trump threatened to impose escalating tariffs against all Mexican products in an unrelated dispute over immigration. Numerous groups, including NMPF, swiftly spoke out against the proposal, and late on June 7th the White House announced it would not proceed with the tariffs.

In a statement issued the day after the President threatened to impose tariffs, NMPF President and CEO Jim Mulhern warned that “New tariffs against Mexico are unlikely to secure the border, but judging from reaction on Capitol Hill, they may very well jeopardize the chances of passing the USMCA, a key White House priority and one that’s crucial for future agricultural prosperity. Re-escalating trade tensions only harms farmers further, just when they were seeing glimmers of hope.” Over the course of the intervening week when the prospect of tariffs loomed, NMPF took the threat of upheaval to this critical market seriously, arming Young Cooperators meeting with dozens of Congressional offices with talking points urging maintenance of open trade with Mexico and joining onto a joint statement with others in the agriculture and business communities.

NMPF estimates that producers have lost at least $2.3 billion in revenues through March due to higher tariffs by Mexico and China against U.S. dairy, which have lowered milk prices for all producers.

Down Go Steel Tariffs, Up Goes USMCA’s Chances

Posted on by Theresa Sweeney

Dairy producers got a dose of much-needed good news in May when North American trading partners reached agreement to end a testy tariff dispute. The trade deal announced May 17 put an end to the Section 232 metal duties that the United States levied against Mexico and Canada last year. In return, Mexico and Canada agreed to end retaliatory tariffs against several U.S. products, including cheese and yogurt. Economists with Informa Agribusiness Consulting had estimated that Mexico’s retaliatory tariffs, left unchecked, would have cost dairy farmers nearly $1.2 billion in lost revenue by the end of 2019.

“Dairy farmers have much to celebrate, with the resumption of normal business with our largest export partner,” Jim Mulhern, president and CEO of the National Milk Producers Federation, said. Congress’s next step should be “to vote on USMCA and quickly ratify it,” he said.

Dairy quickly capitalized on the USMCA momentum, with NMPF joining with the U.S. Dairy Export Council and the International Dairy Foods Association to inform Congress in a letter sent June 10 endorsing swift USMCA approval. The next day NMPF joined with almost a thousand other food and agricultural organizations and companies, including many NMPF members, to send a unified message to the Hill urging movement on the trade agreement.

USMCA modernizes the North American Free Trade Agreement, maintains U.S. dairy sales into Mexico, expands dairy market access in Canada, and reforms many nontariff barriers to trade. Dairy sales to Mexico and Canada should grow by a total of $277 million once USMCA is fully implemented, according to U.S. government estimates.

Dairy exports to Mexico totaled $1.4 billion last year, or 80 percent of Mexico’s total imports, and are poised for further growth under the open trade conditions that USMCA solidifies. Negotiations of the trade deal were completed in November but requires congressional approval. NMPF and its partners at the U.S. Dairy Export Council have pushed for USMCA ratification through a series of Capitol Hill meetings, briefings, special events, and letters to lawmakers.

Dairy Takes Positive Steps Forward, But Trade Tremors Abound

Posted on by Theresa Sweeney

It would be nice to have time to savor real progress, but that seems such a luxury when turbulence is the new normal.

The long overdue end to Mexico’s retaliatory tariffs against U.S. cheese exports last month was a positive development, one of several indicators suggesting that dairy’s fortunes may be improving. But as has often been the case, even that gain was soon thrown into doubt, suggesting that much work remains before we can feel confident we’ve turned the corner on reestablishing a dependable trading relationship with Mexico.

First, the good news: Removing the tariffs, a barrier that has harmed trade with our largest international partner, is important progress in improving dairy’s fortunes. The end of the Mexican retaliatory tariffs put the U.S. fully back as the preferred supplier to what last year was a $1.4 billion dairy market. The May 17 agreement ending U.S. tariffs against Canadian and Mexican metals that prompted the retaliation in the first place shows that, for all the frustrations farmers have felt in the ongoing trade wars, progress can occur.

The end of the tariffs also improves prospects for passing the USMCA trade treaty. Mexico has revised its labor laws, which should help gain support for the agreement in the U.S. Congress, and Canada is vowing “full steam ahead” for ratification. Meanwhile, producer margins are improving, and a better safety net is arriving with Dairy Margin Coverage Program signup on pace to begin June 17, giving producers several reasons for greater optimism about dairy’s economic fortunes.

But the threat of new tariffs President Trump raised in early June, meant to change Mexico’s behavior on immigration issues that are unrelated to trade or agriculture, raised the specter of renewed retaliation. With the resolution of that threat late last week, we are hoping that USMCA momentum, temporarily slowed, may revive and that we can again focus on repairing and expanding U.S. dairy’s relationship with its largest customer. To help build that groundswell of support in Congress, NMPF sent a joint dairy letter on USMCA, together with USDEC and IDFA, to two dozen of the top dairy state delegations in Congress. A day later NMPF joined with almost a thousand other food and agricultural organizations and companies, including many NMPF members, to send a unified message to the Hill urging movement on the trade agreement.

At the same time, turbulence continues with China. New U.S. tariffs on Chinese goods, the result of derailed negotiations  between the world’s two largest economies (and the third-biggest importer of U.S. milk), are likely to invite further retaliation, compounding the sharp drop in dairy exports we’ve already seen to China.

To ease the blow for producers, the Trump Administration, through the U.S. Department of Agriculture, has promised to help producers across agricultural commodities to lessen the near-term economic damage from the trade war with up to $16 billion in a new round of aid.

We at NMPF have been in discussions with the department, suggesting how to target limited resources to best ameliorate the damage.

But we don’t yet know what will be in the assistance package, which means yet more question marks; we’ll keep pushing hard for assistance that mitigates the more than $2.3 billion in damages dairy farmers have faced because of the trade war. But no assistance package can completely capture the full effects of the market uncertainty, interrupted relationships and markets lost to unencumbered competitors who are seizing market share. That’s why we certainly hope the aid package isn’t just as fair as possible – we hope it’s the last one farmers need.

Significant work remains on numerous trade policy fronts to help dairy producers fully recover. In addition to working for USMCA passage, we will continue urging the White House to resolve the renewed tariff spat with China and conclude a bilateral agreement that lowers tensions and improves market access. We also need swift and robust progress in trade discussions with Japan, which the president has promised, so that U.S. dairy interests are not further punished by tariffs and TRQs that each year let our European and Oceania competitors gain ground due to the terms of their trade treaties with Japan.

These steps are necessary to provide certainty, opportunities and improved prices for U.S. dairy producers, something badly needed after the economic turmoil of recent years. If dairy truly is getting back on its feet – and positive signs are emerging – then the next step will be to start moving forward. The end of Mexico’s retaliatory tariffs put us on firmer ground. We can move ahead, despite the tremors that continue to shake things up.

 

 

 

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Dairy Farmers – Industry to Congress: Help Us by Passing USMCA

Posted on by Theresa Sweeney

ARLINGTON, VA – The U.S. dairy industry is urging Congress to quickly ratify the U.S.-Mexico-Canada Agreement (USMCA) with an outreach campaign highlighting the importance of the agreement to the success of America’s dairy farmers and manufacturers.

In a letter sent to representatives of top-producing dairy states, the U.S. Dairy Export Council (USDEC), the National Milk Producers Federation (NMPF), and the International Dairy Foods Association (IDFA) detail how provisions of USMCA positively impact the U.S. dairy industry. The timely resolution of ongoing trade disputes and negotiations is critical to growing the dairy sector’s international market share as well as maintaining credibility with U.S. trading partners. Therefore, the dairy community is asking Congress for immediate passage of this important trade agreement.

The organizations write:

“On behalf of the dairy farms and businesses in your district, please pursue a USMCA vote without delay by working to resolve any outstanding issues as swiftly as possible and then quickly ratify the trade deal to send a clear message to the world that America still values fair trade and robust trade partnerships with our allies.”

“Solidifying and expanding trade opportunities abroad through USMCA will improve the prospects of dairy farms here at home,” said Jim Mulhern, president and CEO of NMPF. “In the midst of uncertainty surrounding our trade relationships and yet another year of meager milk prices, the United States lost an average of seven dairy farms a day in 2018. The passage of USMCA will instill a renewed sense of optimism in our dairy farmers.”

With approximately 16 percent of the U.S. milk supply exported annually, strengthening trading relationships and expanding international market opportunities is vital to the financial well-being of the U.S. dairy industry. USMCA preserves U.S. dairy sales to Mexico, the U.S. dairy industry’s largest foreign customer, while increasing market access in Canada and tackling nontariff barriers that can hinder exports.

“It is time for Congress to swiftly pursue a USMCA vote by working closely with the Administration to resolve outstanding concerns and then quickly ratify this agreement to bring USMCA across the finish line,” said Tom Vilsack, president and CEO of USDEC. “The successful resolution of the Section 232 retaliatory tariffs helped pave the way for this critical trade agreement; while we work together to secure its passage Congress must also stand against the imposition of any additional tariffs that could jeopardize forward progress.”

Michael Dykes, President and CEO of the International Dairy Foods Association said, “On behalf of our dairy industry which pumps $620 billion into the U.S. economy each year, we are making a strong appeal to Congress to vote to ratify USMCA now. To pave the way for USMCA ratification, we ask the Administration to restore a market principled approach to trade –transparent, rules-based and predictable for our North American trading partners. The time has come to focus on what’s important to our economy—maintaining American jobs, growing U.S. export markets, and restoring America’s reputation as a reliable supplier.”

Passage of USMCA would bring a much-needed lift to the United States dairy industry with the U.S. International Trade Commission estimating $277 million in increased sales to our North American partners once the agreement is fully implemented.

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About NMPF

The National Milk Producers Federation (NMPF), based in Arlington, Va., develops and carries out policies that advance the well-being of U.S. dairy producers and the cooperatives they collectively own. The members of NMPF’s 30 cooperatives produce the majority of the U.S, milk supply, making NMPF the voice of nearly 32,000 dairy producers on Capitol Hill and with government agencies. For more on NMPF’s activities, visit www.nmpf.org.

About USDEC

The U.S. Dairy Export Council (USDEC) is a non-profit, independent membership organization that represents the global trade interests of U.S. dairy producers, proprietary processors and cooperatives, ingredient suppliers and export traders. Its mission is to enhance U.S. global competitiveness and assist the U.S. industry to increase its global dairy ingredient sales and exports of U.S. dairy products. USDEC accomplishes this through programs in market development that build global demand for U.S. dairy products, resolve market access barriers and advance industry trade policy goals. USDEC is supported by staff across the United States and overseas in Mexico, South America, Asia, Middle East and Europe. The U.S. Dairy Export Council prohibits discrimination on the basis of age, disability, national origin, race, color, religion, creed, gender, sexual orientation, political beliefs, marital status, military status, and arrest or conviction record

About IDFA
The International Dairy Foods Association (IDFA), Washington, D.C., represents the nation’s dairy manufacturing and marketing industry, which supports nearly 3 million jobs, generates more than $39 billion in direct wages and has an overall economic impact of more than $628 billion. IDFA is the umbrella organization for the Milk Industry Foundation (MIF), the National Cheese Institute (NCI) and the International Ice Cream Association (IICA). IDFA’s members range from large multinational organizations to single-plant companies. Together they represent more than 85 percent of the milk, cultured products, cheese, ice cream and frozen desserts produced and marketed in the United States and sold throughout the world. The diverse membership includes numerous food retailers, suppliers and companies that offer infant formula and a wide variety of milk-derived ingredients. Visit IDFA at www.idfa.org.

NMPF Welcomes California Dairies Inc., Second-Largest U.S. Dairy Cooperative, Into Membership

Posted on by Alan Bjerga

ARLINGTON, Va. – The National Milk Producers Federation today welcomed California Dairies Inc. into its membership, as the addition of the largest dairy cooperative in the biggest dairy-producing state significantly bolsters the strength of dairy producers in speaking with a unified voice on national and international issues of concern to farmers.

“We are very pleased to have CDI’s voice among our already strong and active membership,” said Jim Mulhern, president and CEO of NMPF, which is the largest U.S. dairy-farmer organization. “CDI bolsters the nationwide reach and diversity of our organization and strengthens our ability as farmer-owned cooperatives to tackle a wide array of challenges in marketing, farm labor and trade, food safety, nutrition and product labeling.”

CDI, based in Visalia, produces 40 percent of California’s milk and about 8 percent of all milk in the U.S. By volume, it is the second-largest dairy cooperative in the United States. Co-owned by more than 370 dairy producers who ship 16 billion pounds of milk annually, CDI makes high-quality butter, fluid milk products and milk powders. It produces two leading brands of butter – Challenge and Danish Creamery — and its products are available in all 50 states and more than 50 foreign countries.

“California Dairies, Inc. is excited to begin our membership with the National Milk Producers Federation as we work toward a stronger U.S. dairy industry,” said Simon Vander Woude, Chairman of the CDI Board of Directors.  “Both CDI and NMPF are active and respected organizations in Washington, DC, advocating on behalf of our respective memberships. However, we believe by combining our efforts, we can be an even stronger and more effective coalition, advocating pro-dairy policies that fundamentally strengthen our farmers and our industry as a whole.”

CDI officially joined National Milk today by a unanimous vote of its board of directors at NMPF’s June meeting. The cooperative will have five seats on that board of 53 members. In addition to approving CDI’s membership, NMPF also created a 14-member executive committee, which will include one member from CDI, to serve as a core leadership body, supplementing the work of its officers and board. The members of the executive committee include:

Jay Bryant, Maryland & Virginia Milk Producers Cooperative Operation (Reston, VA)

Beth Ford, Land O’Lakes Inc. (Arden Hills, MN)

Tony Graves, Prairie Farms Dairy, Inc. (Edwardsville, IL)

Mike McCloskey, Select Milk Producers Inc. (Dallas, TX)

Randy Mooney, Dairy Farmers of America (Kansas City, KS)

Keith Murfield, United Dairymen of Arizona (Tempe, AZ)

Ken Nobis, MMPA (Novi, MI)

Doug Nuttelman, DFA

Leroy Plagerman, Northwest Dairy Association/Darigold (Seattle, WA)

Neal Rea, Agri-Mark, Inc. (Andover, MA)

David Scheevel, Foremost Farms USA (Baraboo, WI)

Steve Schlangen, Associated Milk Producers Inc. (New Ulm, MN)

Simon Vander Woude, CDI

John Wilson, DFA

“The addition of the new executive committee will be helpful in gaining additional member input on often fast-developing policy issues, and it reflects the strong interest of our membership in united dairy community action,” said Randy Mooney, NMPF’s chairman and dairy farmer from Rogersville, MO.

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

NMPF Urges the President to Throw Away Possible New Tariffs Against Mexico

Posted on by Theresa Sweeney

ARLINGTON, Va. – From National Milk Producers Federation President and CEO Jim Mulhern:

“Senator Chuck Grassley is right: Border security issues are border security issues, and trade issues are trade issues. New tariffs against Mexico are unlikely to secure the border, but judging from reaction on Capitol Hill, they may very well jeopardize the chances of passing the USMCA, a key White House priority and one that’s crucial for future agricultural prosperity.

“For dairy farmers, renewed turmoil with Mexico also threatens gains made earlier this month, when Mexico dropped retaliatory tariffs against U.S. cheese. Re-escalating trade tensions only harms farmers further, just when they were seeing glimmers of hope.”

NMPF estimates that producers have lost at least $2.3 billion in revenues through March due to higher tariffs against U.S. dairy, which has lowered milk prices for all producers.

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

NMPF Statement on Federal Trade-Mitigation Package for Farmers

Posted on by Theresa Sweeney

ARLINGTON, Va. – From National Milk Producers Federation President and CEO Jim Mulhern:

“Dairy farmers have been harmed substantially by disrupted markets. We know that USDA is concerned about the damage being done to dairy farmers by ongoing tariff battles. We hope it will use the full range of tools available to provide a large segment of the payment in the first tranche to appropriately assist milk producers who have experienced a prolonged downturn in prices because of these conflicts,” he said. “We appreciate USDA’s concern for dairy’s needs, and we look forward to working with USDA, Congress and the White House as the department further develops its plans.”

NMPF estimates that producers have lost at least $2.3 billion in revenues through March due to higher tariffs against U.S. dairy, which has lowered milk prices for all producers.

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

NMPF Celebrates Lifting of Tariffs Against U.S. Dairy; Hard Work Remains on Trade

Posted on by Theresa Sweeney

ARLINGTON, Va. – The National Milk Producers Federation today celebrated Mexico’s lifting of retaliatory tariffs against U.S. cheese exports. Still, hard work remains for lawmakers and officials to further improve the trade outlook for dairy farmers, with the U.S.-Mexico-Canada Agreement yet to be approved and a prolonged trade dispute with China clouding dairy exports.

“Dairy farmers have much to celebrate, with the resumption of normal business with our largest export partner,” said Jim Mulhern, president and CEO of NMPF. “To move forward in boosting exports, Congress needs to pass the USMCA, and administration officials need to resolve the latest impasse in U.S. negotiations with China in a way that’s favorable to producers. Meanwhile, trade negotiations with Japan and other key partners also must move ahead. The time for progress on all fronts is now.”

Mexico is the largest destination for U.S. dairy products, with Mexico purchasing $1.4 billion last year. Mexico’s retaliatory exports against dairy resulted from the U.S. imposition of tariffs against Mexican metals last year. After the three nations announced the end of the metal tariffs on Friday, the retaliatory tariffs were lifted shortly thereafter. Canada, the second-largest destination, also lifted its retaliatory tariffs against U.S. yogurt.

The USMCA, concluded last fall but still not voted on in Congress, would restore trade certainty with our largest export market and increase access to Canada’s market while making key changes to Canada’s trade-distorting dairy-pricing policies. Meanwhile, trade conflict with China, the third-biggest buyer of U.S. dairy, intensified last week. The escalation of trade tensions has left tariffs on U.S. dairy exporters in place, and China recently increased tariffs on U.S. lactose and infant formula, among other goods, showing continued trade damage to U.S. farmers.

The USDA is currently considering assistance to farmers harmed by trade-related actions. NMPF continues to advocate that the USDA develop a robust dairy package that reflects the damages producers have faced.

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

Dairy Industry Cheers Rollback of Tariffs That Bolsters USMCA Chances

Posted on by Theresa Sweeney

ARLINGTON, VA – U.S. dairy officials today congratulated the governments of the United States, Mexico and Canada for reaching an agreement to roll back metal tariffs that have soured U.S.-Mexico cheese trade and slowed passage of the United States-Mexico-Canada Agreement (USMCA).

The United States agreed to end Section 232 tariffs on steel and aluminum imports from its North American neighbors. In return, U.S. dairy officials expect that Mexico will drop their retaliatory tariffs against U.S. dairy products – including duties as high as 25 percent on U.S. cheese exports to Mexico.

“This is an important development for the U.S. dairy industry, and we applaud the hard work of negotiators from all three countries that made it possible as well as the numerous members of Congress that have insisted upon the need to resolve the Section 232 metal tariffs dispute with our North American partners,” said Tom Vilsack, president and CEO of the U.S. Dairy Export Council. “If Mexico lifts its tariffs on U.S. dairy in response, it would be a welcome return to normalcy with our number one export market. It would also build vital momentum for swiftly advancing USMCA towards passage.”

“America’s struggling dairy farmers are in need of some good news, and today’s announcement certainly helps,” said Jim Mulhern, president and CEO of the National Milk Producers Federation. “This paves the way for Mexico to drop retaliatory tariffs that have harmed dairy, and for Congress to take its next step to help our producers – to vote on USMCA and quickly ratify it.”

Mexico is, by far, America’s biggest dairy customer, with $1.4 billion in sales last year. U.S. products accounted for 80 percent of Mexican dairy imports by value in 2018, but that dominant market share was being jeopardized by the retaliatory tariffs.

The tariffs were likewise making it politically difficult for Congress to pass USMCA – a pact that modernizes the North American Free Trade Agreement, maintains U.S. dairy sales into Mexico, expands dairy market access in Canada, and reforms many nontariff barriers.

Vilsack and Mulhern also stressed the importance of finding similar common ground with China, which also slapped retaliatory tariffs on U.S. dairy exporters in 2018 and recently upped the ante by hiking them further on some products. As a result of last year’s move by China, U.S. exports to that fast-growing dairy market fell by more than 40 percent in the first quarter of 2019 compared to the same period last year. NMPF and USDEC have consistently advocated the urgency of resolving both the 232 and China disputes to allow our exporters to compete effectively in those markets.

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The U.S. Dairy Export Council is a non-profit, independent membership organization that represents the global trade interests of U.S. dairy producers, proprietary processors and cooperatives, ingredient suppliers and export traders. Its mission is to enhance U.S. global competitiveness and assist the U.S. industry to increase its global dairy ingredient sales and exports of U.S. dairy products. USDEC accomplishes this through programs in market development that build global demand for U.S. dairy products, resolve market access barriers and advance industry trade policy goals. USDEC is supported by staff across the United States and overseas in Mexico, South America, Asia, Middle East and Europe. The U.S. Dairy Export Council prohibits discrimination on the basis of age, disability, national origin, race, color, religion, creed, gender, sexual orientation, political beliefs, marital status, military status, and arrest or conviction record. www.usdec.org.

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