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US dairy industry holds breath over Trump
The tariff war that US President Donald Trump has started is being watched with fear and trembling in the dairy farming sector in his country. The industry - which has become increasingly export-dependent in the past decade, but was also largely Trump-voter - can therefore do without the measures of their president and the reaction like a toothache.
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Dairy organizations such as IDFA, NMPF and also export promoter USDEC all sounded the alarm this week. Forty percent of the $8,2 billion in dairy exports went to Canada and Mexico last year. Cheese exports to Mexico increased by almost 30% last year. Meanwhile, domestic dairy consumption in the US is declining and several factories are still under construction, which should further increase exports.
The tariff war is putting all of this at risk. Things are moving fast. Trump has already eased off the gas a bit in the dispute with Canada, but Canada is maintaining an additional 25% import tariff on many American products, including dairy, for the time being. The situation with Mexico is unclear, but then there is China, the third export destination for American dairy. In recent years, $500 to $800 million worth of dairy has been shipped there, but China has now also imposed additional tariffs.
No harsh criticism, but concerns and venting
Few in the US are harshly critical of Trump, but the USDEC is responding to the situation by taking another critical look at the dairy trade between the US and the EU. Europe exports $3 billion to the US, while the US can only sell $167 million to the Europeans, complains Vice President Jaime Castaneda. According to him, something needs to be done about that.
In Ireland this is a major concern, as 13% of Irish dairy exports, worth €840 million, go to the US. Kerry in particular is heavily dependent on these exports.
illegal labor
It’s not just tariffs that are stressing the US dairy sector. Trump’s plans to deport large numbers of people in the US illegally are also causing concern. The University of Wisconsin has calculated that stricter immigration policies will increase dairy farm wages by at least 20% and reduce productivity by 10%. Dairy prices in the US will increase by between XNUMX and XNUMX times, according to fears in California. Hard-working undocumented immigrants currently do most of the dairy farming work.
Innovation support and food programs
Third, there are the many cuts that the new administration is pushing through. In Wisconsin, many small and medium-sized dairy farms fear for their future because innovation support is no longer provided. Nationally, a decline in dairy consumption is also expected by about 4% if Trump, as announced, also cuts the many subsidized food programs. He considers them unnecessary, but many poor people in the US live off them.