Volatility ahead road sign
August 18, 2017

Dairy Exports = Dairy Jobs

 |  By: Dairy Talk

President Trump is hell-bent on getting rust belt manufacturing jobs back, many of which he believes were lost to Mexico as companies opened plants there to take advantage of low wages. The re-opening of North America Free Trade Agreement (NAFTA) negotiations last week, however, has fostered nightmare scenarios for all of agriculture.

The fear, from both dairy and other ag commodities, is that Trump’s zealous pursuit of recovering manufacturing jobs, many of which are permanently gone anyway, will cost the U.S. hundreds of millions of dollars in export losses. That could happen if the agreement blows up, or the U.S. chooses to impose tariffs on Mexican exports. Mexico, hedging its bets and diversifying its feed sources, is already buying corn from Brazil.

According to analysis by the International Dairy Foods Associaiton, the U.S. dairy industry directly generates some 977,000 jobs and more than $200 billion in direct output in the U.S. economy. And according to a new study by the National Milk Producers Federation (NMPF), export sales account for nearly 100,000 of those jobs and about $14.6 billion in economic impact, says Peter Vitaliano, NMPF Vice President of Economic Policy & Market Research.

Mexico alone accounts for 25% of U.S. dairy exports--$1.2 billion in sales out of $4.9 billion total exports. Do the math, and Mexico thus accounts for nearly 25,000 U.S. jobs.

Vitaliano went one step further. He parsed out export numbers by state to determine job generation at the local level. It’s a powerful way to demonstrate to Congressmen and women what impact dairy has on their local constituents.

Here are the job numbers and economic impacts estimated coming from dairy exports for the top 10 dairy states. Note, job numbers and value will vary be state due to the different product mixes produced locally. Note, too, these are total numbers, not just those attributed to Mexican sales.

State                                       Jobs                 Economic Impact                               

California                                  9,904             $1,900 million

Wisconsin                               10,254               1,500

New York                                  4,276                   543

Idaho                                        4,185                   735

Texas                                         4,227                   593

Michigan                                   3,954                   491

Pennsylvania                            3,921                   512

Minnesota                                2,883                   541

New Mexico                              2,384                   320

Washington                             1,680                   317


Dairy markets are teetering on a razor’s edge, and any loss of sales to Mexico will literally send milk prices south. So the key message to President Trump as he re-negotiates NAFTA: Don’t screw this up.

Tom Vilsack, former Secretary of Agriculture under President Obama and now President and CEO of the U.S. Dairy Export Council (USDEC) is a little more diplomatic: “USDEC has identified key areas for improvement of NAFTA, such as Canada’s approach to distorting trade through exorbitant tariffs and nontariff policies. But our No. 1 message about NAFTA and Mexico is ‘do no harm’ to this win-win relationship.”  




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