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Industry Seeks Additional Tariff Relief as USDA Reports Increased Milk Production

Brian German Dairy & Livestock, Industry

The U.S. Department of Agriculture (USDA) noted increased milk production in its World Agricultural Supply and Demand Estimates report for October.   Milk production forecasts for 2018 and 2019 have been increased from the month prior on a more rapid pace of growth in milk per cow.  The 2019 milk price forecast has also been raised, however, dairy farmers are looking for some assistance in the meantime.  The National Milk Producers Federation (NMPF) recently sent a letter to U.S. Secretary of Agriculture Sonny Perdue asking for more relief in the next calculation of trade mitigation payments.Increased Milk Production

“We appreciated your efforts to quickly reopen the 2018 signup for the Margin Protection Program for Dairy, and we are ever-grateful for your advocacy on agricultural trade, which is crucial to the economic health of our industry,” NMPF Chairman Randy Mooney said in the letter.  “However, our members are greatly concerned about the level of aid that was provided in the initial effort.”

USDA figures also demonstrate a loss of $.70 per cwt over 2018 due to the increased tariffs that were enacted.  Multiple analyses of the tariff impact on the dairy industry approximate losses between $1.17 billion and $1.5 billion for the second half of 2018.  As dairy herds continue to grow, USDA has also raised overall cow numbers for 2019.  As the industry remains concerned how the increased milk production will fare in the market, NMPF is seeking short-term relief from USDA.

“We appreciate the President’s sincere desire to help. Still, the USDA’s approach has resulted in only $127 million in market facilitation payments, or $0.12/cwt., on one-half of our annual production. Based on the analyses outlined above, this falls far short of the losses dairy producers have faced,” Mooney said.  “We are eager to work with you on a plan that better reflects the struggles dairy producers across the country have faced due to the tariffs.”


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Brian German

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Ag News Director, AgNet West