Wisconsin Dairy Groups Warn Continued Trade Tension With China Will Have Lasting Impact

Some Wisconsin dairy groups say new tariffs exchanged with China will have a negative impact on the future of milk prices.

The Chinese government announced this week it would place tariffs on $60 billion of United States products. The new taxes are a response to President Donald Trump’s decision to place additional tariffs on $200 billion of Chinese goods last week.

American dairy producers have faced increased tariffs from China since July.

Shelly Mayer, executive director of Professional Dairy Producers, said the increased taxes have had the greatest impact on dairy processors. But she said the latest tariff exchange and lack of progress on reaching a new trade deal will affect on the entire dairy industry.

“We were all very hopeful on the dairy farm front that we were going to see better prices in 2019. And the tariffs certainly don’t move us in that direction,” Mayer said.

Mayer said dairy producers need strong international sales, to China and other countries, to pull them out of almost five years of low milk prices.

She said new aid promised by the Trump administration won’t be enough to make up for the current lack of profitability for dairy farmers.

“You’re going to work every day, but you’re paying your employer to be there. And someone says ‘I’ll tell you what. I’m going to give you some money to get on the bus.’ That bus ticket is probably equivalent to the aid,” Mayer said.

The U.S. Dairy Export Council recently reported the volume of dairy exports to China has fallen by 43 percent since increased tariffs first went into effect.

Mayer said once U.S. dairy producers lose those sales, they will be much harder to win back.

“If we continue to have disputes with (trade partners like China) and they don’t think they can trust us, the Europeans and others will fill those orders,” Mayer said. “That could have a long-term, lasting ripple that could have a negative impact on rural America.”

Mayer said agricultural suppliers and other businesses in rural communities that rely on farmers will also continue to feel the impact of low prices.