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The last thing America's dairy farmers need is a trade war with Mexico

The last thing America's dairy farmers need is a trade war with Mexico
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Every June since 1937, America has celebrated National Dairy Month, taking the opportunity to recognize the hardworking men and women who make some of our favorite and most iconic foods possible. After all, it wouldn’t be summer without at least one dripping ice cream cone or a scoop of vanilla with some American apple pie. 

It’s a tradition that these men and women well deserve. If you took cream in your coffee, smeared butter on your toast or swirled yogurt in your granola this morning, you enjoyed the product of a real farm where the cows are milked twice every day, without breaks for holidays or bad weather. Ninety-seven percent of America’s dairy farms are family owned, which means the same farmer who does the milking often also handles the remaining tasks — feeding, birthing, repairing, accounting and more — that keep their business going.

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Besides providing healthy and affordable food, dairy farmers are the backbone of a substantial contributor to the U.S. economy. America’s dairy products industry creates an economic ripple effect that is responsible for $24.9 billion in state and local business tax revenues and $39.5 billion in federal business tax revenues. It supports nearly three million workers, generates more than $39 billion in direct wages and has an overall economic impact of more than $628 billion.

 

But this year, June has our dairy farmers more than a little on edge. Just a few days ago, they received news that their biggest foreign customer, Mexico, is threatening retaliatory tariffs on cheese, among other agricultural products. If these are enacted, the impacts could be detrimental to the industry. Like much of American agriculture, it is highly dependent on exports, especially with our NAFTA partners. 

One-seventh of what dairy farmers produce — or as they like to put it, one day out of every week of work — is exported, an amount that was worth $5.5 billion last year. Those exports in turn support many people in addition to farmers. They create an estimated 100,000 jobs in dairy farming and processing, retail, transportation and more. 

Our dairy farmers are already squeezed between the cost of feed and other farm inputs and stubbornly low global milk prices. Mexico purchases 25 percent of U.S. dairy exports, and it’s a market that we can’t afford to lose.

At the same time, the U.S. dairy industry applauds the administration’s efforts to renegotiate and modernize NAFTA. These negotiations provide a tremendous opportunity for the U.S. dairy industry to gain new market access for the U.S. dairy products into Canada while protecting and building on the market access we have into Mexico. U.S. dairy exports are critically important for enhancing economic growth in rural communities throughout the country. For every dollar of sales associated with dairy exports to Mexico, an additional $2.50 is supported elsewhere in the United States economy, adding up to $23.3 billion over five years.

To be sure, the dairy industry is far from the only sector to be caught in this tug of war on trade, and it’s not even the only part of the agriculture sector to be targeted.

But as Chief Operating Officer at Land O’Lakes, Inc. and head of the company’s heritage dairy foods unit, it’s my job to add value by seeking the best possible return on the high-quality products our farmers create. And I know that to keep delivering the value that they add to their communities and to our economy, it is critical that our administration achieves the highest quality deal they can on NAFTA — even if it takes a little longer than originally hoped.

Our dairy farmers know how to play the long game. Many of the farms in Land O’Lakes’ network have been members of our co-op for generations, and I’m so proud to be a part of a company that’s had staying power for nearly a century. Despite changes in consumer preferences, increasing pressure from Mother Nature, and less than ideal market circumstances, dairy farmers don’t give up. This National Dairy Month, please don’t give up on them. 

Beth Ford is Chief Operating Officer for Land O’Lakes Businesses. Follow her on Twitter @BethFordLOL.