By Danielle Endvick

Wisconsin Farmers Union issued a statement to clarify the actual impact that the proposed U.S.-Mexico-Canada Agreement (USMCA) will have on the U.S. dairy industry. The U.S. Trade Representative reports that the trade deal would open the door for an additional $560 million worth of U.S. dairy products to enter the Canadian market duty-free. That is about 1.5% of the total value of U.S. dairy production.

“A 1.5% increase in dairy products sold is not going to be the salvation of our dairy industry,” says Wisconsin Farmers Union President Darin Von Ruden. Von Ruden, a dairy farmer in Westby, Wis., notes that the U.S. has increased domestic dairy production in 18 of the last 20 years by about 1.5% each year.

“This small increase in sales to Canada may not even offset our own domestic production increase this year, not to mention where we’ll be at two or three or 10 years down the road,” Von Ruden says. “We need to exercise some discipline on our own side of the border rather than looking for salvation outside our borders.”

Von Ruden reiterates Wisconsin Farmers Union’s long-standing call for a federal policy mechanism to balance supply and demand in the dairy industry. “Wisconsin dairy farmers are losing money each time they walk into the barn, because the flood of milk on the market has driven the price lower than what it costs to produce it. No government bailout or new trade deal is going to solve that problem. We need a federal framework for bringing milk production in line with demand, and the longer the federal government puts off doing this, the more equity our farms will lose.”

More milk
USDA data supports Von Ruden’s comments. U.S. farmers keep making more milk, even though Americans are drinking less. Production has increased from 10.3 billion pounds in August 1988 to 17.2 billion pounds three decades later. And it’s coming from fewer, bigger farms. As of February, there were just over 40,000 dairy farms in the U.S., compared with 648,000 operations in 1970.

Agricultural Financial Advisor data from 2017 shows that the average farm lost $1.04 per cwt of milk produced. The USMCA trade deal may provide some additional market for U.S dairy products, but without supply management, there is no guarantee that prices will come up to reduce the losses farmers are facing every day. 

Von Ruden also notes that the USMCA fails to achieve two other important fair-trade priorities. 

“First, the agreement does not provide for country-of-origin labeling for U.S. meat products, which is supported by 90% of Americans,” Von Ruden says. “Second, the USMCA fails to eliminate the investor-state dispute settlement mechanism. ISDS allows multinational corporations to overturn U.S. laws that might reduce their profits. ISDS prioritizes the profits of multinational corporations over the needs of U.S. citizens, and is a direct affront to U.S. sovereignty.”

Endvick is communications director for Wisconsin Farmers Union.