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USDA Announces Financial Assistance Package for Dairy Farmers as Tariff Conflicts Continue

August 8, 2018

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.