Mexican Border Closing Would Send Shock Wave Through Dairy Markets
President Donald Trump’s threat to close off the Mexican border due to a flood of asylum seekers from Central America would send shock waves through the U.S. dairy markets.
Mexico is the U.S. dairy industry’s largest export customer, accounting for $1.4 billion in sales last year. Mexico accounts for 25% of U.S. annual dairy exports, and is the United States’ largest customer for milk powder, cheese and butterfat.
“Closing the U.S. southern border to Mexico would be a gut punch that could set the [dairy] industry back by a decade or two,” says Tom Vilsack, president and CEO of the U.S. Dairy Export Council (USDEC).
“There is not a ready alternative market for the millions of gallons of milk that are converted into thousands of tons of dairy ingredients and cheese we ship to Mexico,” he says. “It is very difficult to fathom the impact closing the U.S.-Mexico border would have on U.S. agriculture, and both the American and Mexican food industries.”
Adds Jim Mulhern, president and CEO of the National Milk Producers Federation: “The dairy industry is suffering through one of its worst economic periods ever. Low milk prices are already creating hardship for farmers, and further supply disruptions would only prolong producer difficulties.”
Mulhern notes seven dairy farms are closing each day, according to USDA data. An econometric study by Informa Economics also estimates every $1 of U.S. dairy exports to Mexico generates $2.50 of economic activity in the United States.