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August 30, 2018

​​​​​​​A Dairy Tariff Relief Promise Not Kept

 |  By: Dairy Talk

I was wrong. When the United States Department of Agriculture (USDA) announced it would provide dairy, livestock and grain farmers relief from its self-inflicted tariff trade war, I cynically said it was more about the coming mid-term elections than providing real relief.

 

The tariff relief package announced by USDA August 27 will do neither. For dairy farmers it means a 12¢/cwt payment on half of their Margin Protection Program production history, and another $84.9 million in dairy food purchases. That’s a total of $212 million out of the $12 billion promised to farmers.

 

The National Milk Producers Federation estimates the damage to be more like $1.10/cwt, totaling some $1.2 billion in losses for just this year. An Informa Economics study puts the damage $1.5 billion this year, and $3 billion in 2019.

 

In fairness to USDA, the agency said further payments could be coming if the tariff war drags on. And we’re only two months into the trade war—so damages have been limited thus far. We should get July export totals in a few days. (USDA also announced earlier in August it was spending an additional $50 million in dairy food purchases to bolster prices—though it made a point of saying these purchases were not part of the tariff relief package.)

 

But USDA Secretary Sonny Perdue also said that no further aid would come if the trade disputes are resolved. A resolution to the dispute with Mexico and Canada might be coming soon. But there is less hope that the fight with China will end anytime in the near future.

 

The Informa study, commissioned by the U.S. Dairy Export Council, suggests that even if there is a resolution with Mexico and Canada, Chinese dairy trade losses could amount to $876 million this year and about $2.2 billion in 2018.

 

What stunned me was USDA’s announcement of the paltry 12¢/cwt payment. It also caught Jim Mulhern, president and CEO of the National Milk Producers Federation, by surprise: “The dairy specific financial assistance package provided by USDA…represents less than 10 percent of American dairy farmers’ losses caused by the retaliatory tariffs imposed by both Mexico and Canada…. If farmer incomes continue to suffer as projected, we will lose more farms.”

 

Mulhern is right. Even if you account for the fact that this is a half-year payment, it comes nowhere near the losses farmers potentially face. And as a farm-aid package announced just 10 weeks before the mid-term elections, it seems politically imprudent, if not inept.

 

While farmer support of President Trump remains strong, it is eroding, according a recent Farm Journal poll.  The tariff aid package gives dairy farmers little incentive to vote. That indifference alone could spell trouble for Republicans in swing districts. Why would the Trump Administration do this?

 

 

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Comments

May be one of the reasons will be blue wave this fall because only way can get rid of this craziness. Markets dropped as soon as he started messing with the negotiations. Part of being a good leader is hiring the right people which he did at first, and letting them do their job, which he didn't do thanks to great and powerful Twitter machine and his firing of anyone he disagreed with. Plus rural people are polite and this rude, bullying approach to everything needs to stop and only way is vote blue to impeach.
Based on location and the electoral college dairy farmers votes are much less valuable than Midwest grain farmers.
The problem is dairy's own making, not Trumps. We've oversupplied the market and then demand access to other markets to dump our excess. We're bankrupting farmers around the world. Countries have a food security interest in being able to feed themselves and not relying on someone else. We should fix our mess at home.
This propaganda is such a pile of barf. Mulhern has no shame shedding his crocodile tears for dairy farmers. He doesn't give a rat's hoot about losing dairy farmers. All a staged act. NMPF is a global corporatized co-op claque of transnational speculators who make fortunes by marketing farmers' milk below realistic American "cost of production." These are not pro-FARMER organizations.

NMPF already told Conaway's Ag Committee in 5/16 that US dairy farmers were hemorrhaging $20 billion in 2015 alone thanks to the rotten way US dairy farmers' milk checks are figured under the federal minimum formula. It is not a “tariff war” on dairy farmers. Get real! The tariff should be no big deal IF DAIRY FARMERS WERE RECEIVING A FAIR PRICE FOR THEIR MILK in the first place!

The "war" on dairy farmers has been waged since April 1, 1981, by our own government, with action by the US CONGRESS when the support/parity programs were forever altered. For decades, dairy farmers have been in the crosshairs of the government globalists in DC, the co-ops, Farm Bureau, NMPF, land-grant, Congressional Ag Committees, BOTH parties, all administrations, whether R or D, eliminating 90% of our old-fashioned local dairy farmers, all to advance the NEW WORLD ORDER of low farm commodity prices to implement secret "Free Trade" commitments at the expense of US dairy farmers.

With many dairy farmers being shorted at least $6/cwt below average cost of production in their rip-off milk checks, go figure the income shortfall on 212 BILLION # of US annual milk production---the FARMERS' money they need to pay THEIR bills!!! Factor these massive losses across the rural economy, and you see “America ain't 'gonna be great again” with these anti-American-farmer federal dairy policies!

Then the feds peel off nearly $2/cwt from farmers' milk checks for their crony processors' "make allowances" to cover the processing INDUSTRY's "cost of production," even though the feds eliminated the DPPSP in that same criminal 2014 “Farm” Bill.

Then there is "Margin PROTECTION INSURANCE" (MPP)---what a joke---we have to pay INSURANCE for "protection" against the theft of our own milk, again part and parcel of the DEFECTIVE FEDERAL minimum milk pricing formula that was block-voted by the NMPF Capper-Volstead co-ops into existence in 2000 to the perpetual detriment of dairy farmers and their private property. MILC was another farcical effort the feds used to mask the symptoms of the death of the average family dairy farmer.

Now--- since the 2014 "Farm" Bill scam--all dairy farmers, who are the real wealth creators in rural dairy farming communities, are under mandatory socio-economic death sentences from private-property-killing low milk prices while their milk is virtually stolen by the dairy processing Industry with the permission of our globalized federal government.

So, just lay off it. With these long-standing abusive policies, why should $.12/cwt. on 50% of MPP shock you? Tariffs are nothing compared to the dairy farm losses coming from domestic federal US dairy policies.

Support the Emergency floor price of $20/cwt under milk used for manufacturing WITH MANDATORY FEDERAL HEARINGS INTO ALL THIS DAIRY CORRUPTION!