U.S. dairy farmers who were caught in the middle of President Trump’s escalating trade war with several countries this summer are pleading for more cash as the tariffs have cost them more than $1 billion in profits since May.
In a letter sent to Agriculture Secretary Sonny Perdue, the National Milk Producers Federation’s chairman and dairy farmer Randy Mooney said the first round of subsidies issued in August has done little to compensate for lost sales and lower milk prices.
“We are ever-grateful for your advocacy on agricultural trade, which is crucial to the economic health of our industry,” wrote Mooney, who operates Mooney Dairy in Rogersville, Missouri, with his wife, Jan. “However, our members are greatly concerned about the level of aid that was provided in the initial effort.”
While the USDA has made more than $4.7 billion available to farmers, starting in September, and has bought $1.2 billion worth of surplus food, the $127 million of that which has been allocated for dairy farmers would only pay such farmers 12 cents per 100 pounds of milk, on half of this year’s production, which is simply not enough.
“Based on the analyses outlined above, this falls far short of the losses dairy producers have faced,” Mooney added, noting that estimates show that farmer losses from the tariffs will notably exceed $1 billion in 2018 and significant income losses will continue if they stay in place.
Joseph Cook, senior dairy analyst for Informa Economics, agrees and notes that the tariffs are also “coming at a time when U.S. farm gate milk margins have remained at the lowest levels seen in years for most of 2018.
“The impacts of the tariffs will continue to exacerbate lower margins for an industry seeing a high rate of retirement from small dairy farms,” Cook told FOX Business.
The significant loss of profits are from both China and Mexico. China is the largest importer of U.S. whey and Mexico is the largest importer of U.S. cheese.