Farmers Discuss State of the Dairy Economy in Washington

State of the Dairy Industry 050119
The United States capitol. ( Lindsey Benne )

During a two-hour public hearing on the state of the dairy economy, dairy farmers and industry leaders alike shared testimony on the dire straits of the dairy industry. Concerns over trade and labor dominated the conversation. 

“While it’s not this committee's jurisdiction, immigrant labor is absolutely critical to my operation,” said New York dairy farmer Mike McMahon. “Regardless of the unemployment rate in our county, local labor doesn't want to work on a dairy. A 2017 Texas A&M study found that 79% of the U.S. milk supply is harvested by Hispanic workers. Agriculture needs a way to secure American workforce that is willing, able and legal. I realize that immigration from top is a difficult topic, but agriculture’s need for immigrant labor is undeniable. America needs a safe, affordable and abundant food supply produced within its borders. Food security is part of Homeland Security.”

McMahon then outlined his ideas for a workable ag immigration program which includes offering a path to citizenship for illegal workers who have been working in the U.S. for a specific number of years, and an easier way for foreign workers to work on U.S. dairies for a period of time legally. 

“Free trade agreements that open markets and lower trade barriers are crucial to the dairy industry’s long-term economic health,” said Andrei Mikhalevsky, president and CEO of California Dairies Inc. “The U.S. has not completed and passed a new trade deal in well over a decade. We need more comprehensive free trade agreements.”

Because domestic milk prices are heavily influenced by global prices, U.S. milk price recovery relies on the global market, he said. 

“U.S. milk price recovery was halted in 2018 due to EU intervention stocks, and the retaliatory terrorists with Mexico and China,” he said, adding that the most valuable export markets for the U.S. dairy industry are Mexico, Canada, Japan, China, South America and Southeast Asia. “The EU has trade agreements completed or in process with nine of the top 10 dairy importing countries while the U.S. simply has four.” 

From the dairy industry perspective, there are just two criteria that must be met in any new trade agreement, according to Mikhalevsky. First, a level playing field, and second, robust access for all dairy products. 

Mikhalevsky also touched briefly on trade talks with Canada and Mexico. 

“Mexico is the top market for all U.S. dairy exports valued at $1.4 billion in 2018. Canada is second,” he said. “The USMCA deal as negotiated meets the dairy industry's top priorities. And that is why we urge swift congressional approval of this agreement.”

In relation to China, Mikhalevsky says the country that is traditionally the third largest export destination for U.S. dairy is buying less product because of imposed retaliatory tariffs. 

“The point remains that growth in U.S. dairy exports is vital. The implementation of new trade agreements like the current efforts with China and the ratification of the new USMCA agreement remain critical,” said Scott Brown, a University of Missouri Extension economist. 

All of the farmer witnesses, including Sadie Frericks of Minnesota, McMahon of New York and David Smith of Pennsylvania, agree. 

Submitted by Paul s on Wed, 05/01/2019 - 16:37

I always hear about export,but that is only 1 part of the total picture!!
I never hear any of those smart poeple talking about import!!!
I also dont hear these same smart poeple talking about the pressure we get from the FAKE milk(nutmilk).
85%of our total milk has to be sold in the usa but there is nobody fighting for that market here.
We have dairy representatives who do nothing on that,because they are to busy talking about export,which by the way was up in 2018.
We are losing market share in our own backyard !!!
Every month we as dairyfarmers pay "so called" advertisement fee out of our milkcheck but never see any or very little in return for that.
These guys should be paid on a basis to the class 3 price,not on per hundred weight basis,so that when our milkprice gies down there paycheck is going down too.
They will find out then that it has no benefit to produce more milk if you dont get paid.
One more statement"cheap labour will make cheap milk".
Think about that if that is really the direction you want to go with this industry!!!

Submitted by Helena devries on Wed, 05/01/2019 - 16:55

How convenient that you guys never talk about import ,europe imports 1.8 billion worth of cheese into the US.Maybe next time you should talk about this when the next rounds of trade deals are made.For europe the US is a big market ,maybe trump is right and the current trade deals are lobsided???

Submitted by Melanie on Thu, 05/02/2019 - 06:07

What are "retaliatory terrorists"?

Submitted by Linda A. on Thu, 05/02/2019 - 09:40

Our family just an event in Wyoming County NY, to hear about key resources from local, state, and federal economic development and agricultural agencies. We find that most of the substantial finances are going to the large farms. Farms that can afford  (or not afford) to set forth, as in this case, a 50 thousand dollar bill, in hopes to being granted a two million dollar pay out ! How do smaller and mid size farms compete against this unfairness in the dairy market? All Real Dairy Farmers should be cherished as an essential part of feeding America. Instead, the dairy industry is being turned into creating a market for greed. When all our Real Farmers are gone, and there is no Real Farmer left to grow nutritious food for tomorrow’s generation, why is it the Real Farmer is suppose to put their energy into fads? Dairy cows are large living creatures, which need the care of a Real Farmer, who is being thrown the wayside. Looking at the “new Ag” , beer and alcohol distilleries, marijuana, corn for ethanol, manure for methane, robots for milking cows, etc., are all progressive new businesses now taking necessary wealth from the food industry. Today’s agriculture is spreading itself thin, instead of thinking of communities, children, or the agricultural future which is now being tampered with.
Many people can relate to what it takes to care for a pet? You need to purchase food, have medical, a clean environment, and plenty of care. Does the consumer think a cow is any different? Why are we now looking only at the “potential” dollar bill in this industry, instead of the well-fair of the animal, and toll on the talented Real Farmers we have left? The dairy industry, like any other industry is of course changing, physical help and pay, no longer is available. The dairy industry did not need help to be pushed along to this reality, with different levels of government money being made available to some farmers, and not other farmers. This separation divides the industry, not unionized as a whole, like other professionals.
Us smaller, mid size, Real Farmers, are the backbone, and stewardship of our country and our land. Tossing aside talented farmers who are working their ground, and doing a fine job in their community, should not have to put in more hours to do a “nitch” market, anymore than any other American worker, who do not work half the long hours a Real Farmer does. Many American workers have medical insurance, and most importantly, get raises in their pay.
What was the price of a new car in the 80's? Why do farmers have to bear the cross of their product by not receiving a fair wage? Who will be that person who will gobble up the farmers land, because they have the currency to do so. Some areas in our continental states, will be like Alaska. There is only ONE dairy left in the State. The people rely on “not green energy” transportation for food. Alaska imports 95% of their goods, when at one time, sustained about 50%. They can’t find labor. Who wants to work hard as a farmer for little pay? No one.
This is why we should be thanking all our farmers for their blood, sweat and tears it takes to feed our Country’s adults and children. When a farmer is "killed in action" no one lines the streets with sorrow, the supermarkets are still full, and that is where we get milk from, right? Shelves maybe full now, and lots of food wasted in our Country, but by putting all our eggs in one basket, it is not the smart future thing to do. Ask the people in Alaska who have supermarket bare shelves, and do not get the taste of pure, fresh, whole local milk.
Alaska may seem like a different County, because it sits alone up north, but we can learn from their misfortune. We used to teach our children who the "good guys" were in our Country: The Policemen, the Firemen, the Teachers, and the Farmers. Soon one of those professions will be gone. Virtual Farm Tours are already the new trend for school children. We are teaching our children a untruth by making a sweet video of the dairy industry. We can make the cows look like movie stars, when it is the Real Farmer who is the movie star. They do all the intelligence and physical work to bring forth milk and food to you. The farmer is the hero of the story.
By not paying Real Farmers at least the "average" price it cost for production of the product, like any other industry in America, the last Real Farmer will turn out the lights. Dairy farming should not be profession needing a masters degree to monitor labor in the field. We already have disciplined Real Farmers available, only asking for a fair wage. Future America could always have Real Farmers working within the branch of knowledge of farming, but what youngster wants to grow up to be paid so little? Being a Real Farmer was once an ability to be a “good guy”.
Real Farmers need a raise in pay, not an “itchy” nitch. America needs REAL FARMERS !!!

Submitted by Guedo on Thu, 05/02/2019 - 21:04

Thats the ticket keep pushing illegal labor, and continue to see small farms disappear.