Dairy Cooperatives Appreciate Tariff Aid; Demand Stable Trade

Pres Trump says he 'loves' farmers so he directs USDA to develop an assistance package to help farmers hurt by tariffs. (July 2018) ( MGN )

The latest round of trade aid announced by the Trump Administration is getting mixed results among dairy cooperatives that are growing concerned with the impact of tariffs.

On May 16, the second year of tariff aid payments under the Market Facilitation Program (MFP) through USDA was declared. Several cooperatives representing dairy farmers around the country released statements about their appreciation of the relief, but a preference for long-term trade stabilization.

During an interview with Bloomberg, Beth Ford, the chief executive officer at Land O’Lakes Inc., expressed that tariffs have taken about $2 billion from dairy farmers.

“What do farmers want? They want trade. Nobody wants a payment,” Ford says. “If they have to have an interim payment, they would like something more reflecting the loss in the market that hit them.”

Ford – who represents 1,851 dairy farmers – doesn’t think the first round of government trade aid went far enough paying out approximately $250 million to dairy producers. The newest package is slated to have $16 billion in programs with $14.5 billion in direct payments to all farmers, but there aren’t clear details on how that breaks down for dairy.

“I don’t know the specifics of how that’s going to be allocated,” Ford says of the new trade aid package. “We certainly voiced to the administration our concern, especially around dairy farmers not having received a significant amount of that first round, and they are under tremendous pressure. We are going to see what the administration has allocated, what the math comes out with. The math last time wasn’t terrific.”

Wisconsin-based Edge Dairy Farmer Cooperative expressed similar views on where the various trade disputes have put things.

“There is no sugarcoating the fact that rising production costs, low milk prices and disrupted markets continue to inflict serious pain on our dairy farmers. So we welcome and appreciate this new financial assistance,” says Brody Stapel, president of Edge and a dairy farmer in eastern Wisconsin. “But we also recognize that the aid will provide only partial and short-term relief for farmers, many who have been barely breaking even or operating at a loss for many months now.”

Stapel would like to see free trade agreements continuing to be pursued and hopes his cooperative can continue working the administration getting more deals done that help dairy farmers.

“Edge Dairy Farmer Cooperative’s objectives for trade are straightforward: Expand access to global markets with no net loss to existing ones by nurturing more opportunities and not disrupting favorable ones we have worked so hard to develop,” Stapel adds.

FarmFirst Dairy Cooperative – which has members Wisconsin, Minnesota, South Dakota, Michigan, Iowa, Illinois and Indiana – was thankful for the action, but worried about the trade outlook with continued tariffs.

“We greatly appreciate the concern that the USDA has for U.S. dairy farmers as they discuss and prepare a trade mitigation package during these trade discussions and tariff battles with China. While the previous mitigation had good intentions, it fell short on providing much needed support to U.S. dairy farmers,” says John Rettler, president of FarmFirst Dairy Cooperative.

FarmFirst Dairy Cooperative is optimistic about the program providing support for dairy and Rettler hopes the administration “will ultimately provide greater trade opportunities for U.S. dairy products.”