Milk swirl.
July 30, 2018

Despite Tariffs, USDEC Will Soldier On 

 |  By: Jim Dickrell

Last fall at World Dairy Expo, the U.S. Dairy Export Council announced plans to grow dairy exports to 20% of U.S. milk production in the next three to five years.


Sales had been hovering at about 15% of U.S. milk production last year, but then surged past 17% this spring. Then came tariffs imposed by Mexico and China in response to President Trump’s imposition of tariffs on many of their exports to the United States.


“I don’t think we anticipated the impact of tariffs in Mexico and China [last fall],” says Tom Vilsack, USDEC president and CEO.


Vilsack won’t say whether the tariffs will impact USDEC’s timeline, but he says his organization is still focused on getting the job done. Mexico and China present two different challenges, however.


The imposition of retaliatory tariffs by Mexico eliminates the price competitiveness U.S. dairy products enjoyed over the rest of the world. But the U.S. still has a logistical edge, being on Mexico’s northern border. And U.S. suppliers also have developed close working relationships with Mexican buyers.


“I believe that at the end of the day, NAFTA will be renegotiated. It will be modernized and the tariffs will be lifted, and we will have strong market opportunities in Mexico,” he says.


China presents a completely different set of challenges, however. The U.S. is trying to develop a more fair trading system with the Chinese, and that could take time. Vilsack hopes product now going to China could be redirected to growing markets in other southeast Asian countries, the Mideast, Africa and Latin and South America. “Our challenge and our job are to make sure we continue to be aggressive in selling [dairy] products around the world,” he says.


Read more on the dairy industry’s view of tariffs here and here.


You can view the full Vilsack video here.