According to an analysis by the National Milk Producers Federation a Free Trade Agreement (FTA) with Australia would force more than one-forth of U.S. dairy producers out of business. It also would remove about 113,000 jobs that are generated by milk production and processing in the U.S.  In total, more than 150,000 Americans whose livelihoods depend on a healthy U.S. dairy sector will lose their jobs if the U.S. government agrees to a FTA with Australia.

“The threat of economic devastation to rural communities across America as a result of Australian dairy imports is real. Australia’s products would swamp our markets and wipe out thousands of small- and medium-sized family farms in the process,” said Jerry Kozak, President and CEO of the National Milk Producers Federation. “Beyond this direct devastation to our nation’s dairy farmers, tens of thousands of additional jobs in veterinary care, feed sales, dairy processing, distribution and sales would also be lost.”

The only beneficiaries of the deal: Australia’s dairy industry and a handful of multinational processing and retail companies who could then buy wholesale products at a cheaper price.

   States where dairy farmers, processors and rural communities are most at risk include California, Florida, Idaho, Michigan, Minnesota, New York, Pennsylvania, Washington and Wisconsin.

Kozak said U.S. milk producers support liberalizing trade on a multilateral basis through World Trade Organization (WTO) negotiations because current world dairy prices are heavily distorted by international trading practices and subsidies. 

If the U.S. agrees to a FTA with Australia, the estimated dollar loss to America’s dairy farmers is about $2.6 billion per year. 

Kozak said NMPF’s analysis is not the only one raising warning flags for America’s dairy sector.  Even a report prepared for Australia’s Department of Foreign Affairs in 2001 indicated that liberalized trade with the U.S. will increase Australian exports by “a massive 354 percent,” as “domestic users substitute away from dairy products sourced domestically…to the now relatively cheaper Australian products.”

Kozak said that America’s dairy farmers feel that “this FTA will negatively impact our food security — and thus, also our national security.  No homeland can be secure if the quantity and quality of its dairy supply is in doubt.”  Kozak pointed to remarks that President Bush made two years ago while speaking to a group of America’s cattle producers that “it is in our national security interests that we be able to feed ourselves.”

Negotiations between the U.S. and Australian governments will convene again in Washington starting Jan. 19, when Australia will continue pressing its case for the complete elimination of all U.S. dairy tariffs as part of the FTA.

NMPF press release