US-China trade war effect on American dairy farmers

World Today

“Better days are ahead.” That is the message to U.S. dairy farmers from U.S. Secretary of Agriculture Sonny Perdue.

The number of farms filing for bankruptcy in Wisconsin – nicknamed ‘America’s Dairyland’ – has doubled in recent years, following a fall in milk prices in 2014.

A surplus of milk in the U.S. means there is more pressure to find new markets overseas. CGTN’s Dan Williams reports.

The World Dairy Expo is a celebration of one of America’s key agricultural sectors. U.S. dairy is worth an estimated $620 billion in overall economic impact.

But the industry is struggling, following years of falling milk prices.

The number of dairy farms in Wisconsin has almost halved since 2005. But the message from Perdue remains upbeat.

“So when you look forward, not backwards, there is no doubt there has been economic stress in the dairy industry, but we believe the better days are ahead,” said Perdue.

The dairy industry is a hugely expensive operation. Some of these prize-winning cows are worth more than one hundred thousand dollars each. And export markets are a key part of the business.

Dairy industry officials estimate that nearly 16% of all U.S. milk produced last year went to the export market. Exports to Mexico alone are worth $1.4 billion.

But a key focus could fall on China, which is expected to become the world’s largest dairy marketplace within the next three years.

But with tariffs currently in place following the trade dispute between the U.S. and China, U.S. farmers are losing out to competitors.

“We have seen some growth within China in so far as a market. But now that we are in trade discussions with them, those sales have dropped off,” said Jeff Lyon from the Farm First Dairy Cooperative. “If we don’t have those markets around the world, we will see a real contraction of our entire dairy industry. It would get real small in a real hurry.”

One of those already counting the cost of tariffs is Ellsworth Cooperative Creamery.

They were shipping a container of dairy products every other month to China. But that has dropped significantly during the trade war.

New trade agreements with Mexico, Canada, and Japan offers hope for U.S. dairy farmers. But few here are getting excited by that.

The industry continues to face strong headwinds-even at home where plant-based beverages like soy milk and almond milk now account for 13% of the U.S. milk market.