August 1, 2018

US$12 billion aid package may not be adequate to ease losses
 

The US dairy industry is already reeling from losses amounting to US$1.8 billion over the last few weeks due to the retaliatory tariffs by major trading partners, Tom Vilsack, CEO of the US Dairy Export Council, said during an interview with MSNBC.

Furthermore, Vilsack added, the US$12 billion assistance rolled out by USDA last week to help farmers is not a solution for the long run. "It is a fairly significant challenge farmers face because of the tariffs. Markets that were open, markets that had momentum, are now shut off," he reiterated.

With the tariffs imposed, trading dynamics are rapidly changing and the sources of revenue are quickly shrinking. Mexico, for example, has been the number one market for US cheese exports. "Our cheese used to be very, very financially advantageous to the Mexicans because of NAFTA," Vilsack explained.

"The retaliatory tariffs assessed by Mexico make it less attractive for Mexicans to purchase cheese from the U.S. We still have a logistical advantage but at the end of the day the tariffs have made it difficult to make the financial case."

"The bail-out does not necessarily guarantee that we can regain those markets back that we will lose over time as a result of these tariffs. Farmers want trade not aid," he concluded.