Not much federal support for dairy; farmers feel effects of trade tariffs
ST. ALBANS — Better than nothing, but not by much.
That’s how farmers, industry officials and members of Congress are characterizing the Trump administration’s plan to aid dairy farmers hit by tariffs as a result of the President’s “trade war.”
The proposal includes direct relief of 12 cents per hundredweight on half of a farm’s 2018 production, totaling $127.4 million nationwide, and $84.9 million in purchases of dairy products.
This past summer dairy farmers experienced between $1.8 billion and $2 billion in losses as a result of tariffs, according to dairy economist Bob Wellington. Mexico, Canada, China and the European Union imposed tariffs on cheese and dairy products in response to Trump’s tariffs on goods from those countries.
Asked for his view of the administration’s plan, Wellington, a vice president at the Agri-Mark Cabot cooperative, did not mince words.
“I think it’s an insult to dairy farmers whose income was hurt by the tariffs,” he said.
The proposed relief, he said, is the equivalent of 1 cent on a pound of cheese.
Highgate farm owner Jacques Rainville agreed, saying, “It’s a slap in the face.”
In 2017, Vermont farmers made 2.7 billion pounds of milk, according to the USDA. Assuming 2018 production is close to that number — it’s likely to be lower — Vermont can expect to see $1.6 million in assistance to be spread amongst all Vermont dairy farms.
Wellington contrasted the size of the dairy relief package with that given to soy growers — $3.6 billion in direct relief. Estimates from researchers at Ohio State University and Illinois University place the losses for soy farmers at $2 billion, on par with dairy.
Although the administration promised $12 billion in relief, just $6 billion has been announced so far, with nearly three-quarters of that assistance going to soy.
The other major beneficiary of the relief package is the pork industry. Hog farmers will receive $290.3 million in direct aid and $558.8 million in government purchases of pork.
With the exception of corn, no fruit, vegetable or nut growers are receiving direct assistance, although some funds were allocated to purchasing products. Almond growers, who suffered years of drought that ended in 2017, are expected to lose $1.5 billion as a result of the tariffs, according the University of California-Davis, but just $63 million has been allocated to bolster the industry, with no details on how that money will be spent.
“We were extremely disappointed,” Wellington said. “We really expected more from (U.S. Secretary of Agriculture Sonny Perdue) and President Trump.”
“They knew the suffering out there,” Wellington added. “Knew it was the result of their actions.”
Asked what impact the dairy commodity purchases may have, Wellington said, “It’s better than nothing, may have a small impact.”
Vermont’s Congressional delegation was also unhappy with the administration’s plan.
“This aid package falls far short of what’s needed to undo the harm inflicted by this administration’s policies,” said Rep. Peter Welch, a Democrat. “In Vermont and across the country, our dairy farmers want trade, not aid. Instead, they’ve seen their trade markets dry up and are left with a paltry payout from USDA that will cover only 10 percent of the total damage that this misguided trade war has caused.”
Sen. Patrick Leahy said, “I take some comfort in seeing the rollout of these dollars to the extent that it at shows at least some recognition by the administration that the President’s unnecessary, haphazard and misguided trade war is hurting farmers and consumers. That said, the support going directly to dairy farmers is much too low to provide even short-term relief from low prices.
“Every Vermont farmer I’ve talked with would much rather have strong, predictable, long-term international markets for the milk they produce, than a one-time payment of a few thousand dollars, and uncertainty as far as the eye can see, as we conduct our foreign relations and trade policy in random early morning tweetstorms. Farms are businesses, and farmers need to be able to plan for the future.”
Sen. Bernie Sanders agreed with his colleagues, calling the administration’s plan “woefully inadequate.”
“The Trump administration’s proposal to mitigate the damage from his misguided tariffs is woefully inadequate. Trump’s ‘solution’ is to offer dairy farmers a few extra cents per hundredweight of milk, while economists say the true cost to farmers will be more than a dollar per hundredweight,” Sanders said. “After years of low milk prices, our struggling dairy farmers should not be asked to bear the brunt of Trump’s foolish trade dispute with Canada. It’s grossly unfair, and our farmers simply can’t afford it.”
NOT A SOLUTION
“What’s 12 cents?” said Enosburgh farmer Phil Parent. “Keep it and give us a tool that addresses the elephant in the room.”
That elephant is an oversupply of milk. Farmers are now resuming conversations about how to address the excess after suffering a loss in 2012 when then Speaker of the House John Boehner blocked a supply management program from being implemented.
Some farmers have called for that program to simply be implemented now, while others are proposing longer-term relief.
Either way, farmers will need the assistance of Congress. Highgate farmer Bill Rowell pointed out that while Congress has shown some willingness to help, it hasn’t been enough willingness to actually get anything done.
“I don’t think they fully appreciate the gravity of the situation,” said Rowell. “It’s going to impact a lot of people when this thing goes down.”
In addition to farmers, the industries which support farms from feed and equipment dealers to vets, hoof trimmers and lenders, may well see losses as their customers go out of business.
The administration has been pushing Canada to relax its tariffs on milk, which Canada combines with a supply management system to insure its dairy farmers earn enough to meet their cost of production.
Rainville, however, didn’t see much promise in being able to sell more milk to Canada.
“It’s going to bring our cheap price over there to lower their price,” he said, exacerbating a race to the bottom for farmers instead of correcting the problem.
One bright spot, according to Wellington, is that payments to farmers from an anti-trust settlement with the Dairy Farmers of America (DFA) may arrive this fall. Those payments, he said, are expected to be larger than the checks coming from USDA.
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