US dairy sector sends fire letter to Trump

American Dairy Coalition (ADC) has sent a burning letter to US President Donald Trump. It contains the urgent request to end the crisis on the dairy market. Due to the trade wars with China, Canada and Mexico, dairy prices are in dire straits.

The US dairy industry has become embroiled in the trade war and as a result, exports are more difficult. This also leads to an oversupply of dairy products in the internal market, resulting in low milk prices. For example, cheese exports to Mexico fell by 10% and export losses to China even rise to 65%.

Compensation amount far too low
Dairy farmers are unhappy with the emergency plan Trump launched in August; In it, he pledged $1,2 billion for the US agricultural sector, of which $85 million for the dairy industry. According to the dairy farmers, this amount is far too low. According to its own calculations, the damage from the trade war last year was about $1,5 billion.

The new NAFTA agreement so far does not do what it promises. The treaty was signed in October and should ease exports of dairy products from the United States to neighboring countries, the Trump administration has argued. The positive effects wait, however,

Towering cheese stocks
Due to difficult exports, American cheese stocks have risen to 1,4 billion pounds (700.000 tons). At this point, the shoe pinches for American dairy farmers, because this exerts a depressing effect on the milk price. The ADC therefore proposes distributing the cheese stocks to the 40 million Americans who face food shortages every day.

Whether Trump heeds the call remains to be seen. However, the United States and China have had conversations to initiate the trade war. However, the results are not yet known. This does not alter the fact that Trump is optimistic about a possible deal. He believes that China should be constructive, now that the Chinese economy is showing cracks.

Wouter Job

Wouter Baan is editor-in-chief of Boerenbusiness. He also focuses on dairy, pig and meat markets. He also follows (business) developments within agribusiness and interviews CEOs and policymakers.

w.baan@boerenbusiness. Nl

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