Have Trump's Tariffs Killed the Dairy Industry?
First of all, tell us what the US dairy Export Council is and what the organization do. The US expert council. It's funded through checkoff dollars receive from dairy farmers when they send sell their milk. And it represents roughly one hundred ten businesses processors, co ops traders who are involved in selling dairy products around the world principal markets are in Asia, the Middle East North Africa, Mexico and central and South America. We found out late Friday that tariffs against Mexico will not be going into effect tomorrow. And we expect the sessions on trade with China coming up after g twenty now what thick would tariffs have had on agriculture and more. Specifically on the dairy industry. Well, this is obviously a rough stretch for agriculture generally prices are low in part because of the tariffs China is a major market for number of our commodities. So I being dairy specifically. And so it's been it's been rough patch of the administration has provided some assistance, and help through the trade assistance programs, which have been announced some resources have been provided. But at the end of the day, I think farmers are very happy with the fact that we're not going to see tariffs assessed against Mexico on Monday and certainly happy to see the steel and aluminum tariffs lifted so that we're in a position to work with our friends in congress. Try to get the US MCA the trade agreement which is going to replace NAFTA ratified and put into effect because that would have a positive impact on agriculture. Now what? Now, we found out that the Mexican terrorists will not be going into effect. What's our trade relationship with Mexico right now? How? Much does Mexico by from the United States, how the United States of the United States from Mexico. Well, it's a positive relationship for US agriculture. I can just tell you specifically for dairy Mexico is our number one market, roughly thirty percent of all the dairy products that are exported around the world are exported from the US to Mexico. It rough roughly consists of seventy five percent of all the dairy imports that country receives. So it's an incredibly important market. That's why we're hopeful that congress ratifies the US MCA so that we are able to maintain that market free of any barriers, and perhaps open up the Canadian market a bit as well. This should help farmers across the United States. And obviously, if we could get things resolved with China, that would even better. Now you serve as agriculture secretary. But for some of the US MCA is, and how that affects this conversation. Well, President Trump indicated disatisfaction with the current NAFTA trade agreement which involves Mexico, Canada and the United States. It's an agreement that's been in effect for over twenty years. It required. Some modernization the administration's been engaged in negotiations with Canada and Mexico. They've reached a consensus and agreement for dairy what it means is preserving that number one market in Mexico, and providing for free flow of dairy products across the border and for Canada, it really potentially could be an opportunity for us to open up additional market opportunities in Canada. They have a very close system in Canada. It has been difficult for us to export in Canada. The agreement provides for additional opportunities for us. In terms of exports. It also ends of pricing system that candidate put in place, which has been making it very difficult for American dairy farmers to sell powder around the world at a profitable price. So it gets rid of that pricing system. Replaces it with a pricing system, which we think hopefully, we'll be fair. And at the end of the day, the bottom line is the expectation is roughly two hundred to two hundred twenty million dollars additional business opportunities going to open up for dairy farmers as a result of US MCA for the rest of agriculture it's really preserving markets have been very effective and very important for corn farmers. For example. For the pork industry, into a certain extent the beef industry. It's also benefiting from our relationship with Mexico, so a real opportunity. We farm are going to benefit from this agreement a bit. So at the end of the day, it's going to be a positive Netafim for American agriculture, and this is important for your viewers to understand American agriculture is a trade surplus with the rest of the world. In other words, we sell a lot more agricultural products to the rest of the world than we buy from the rest of the world. It's a wonder a great opportunity for us because it helps to create and support jobs in the US export related jobs, usually end up paying more than just general regular jobs in the economy. So it's a it's a opportunity for us. Not only to help farmers, but also to maintain good, paying jobs. I want to let our viewers joining this conversation with US dairy expert council presidency. Oh, Tom Vilsek, if we're gonna open up our regular lines, if you're a Republican, we want to hear from you at two two seven four eight eight thousand one. If you're. A democrat. We want to hear from you two two seven four eight thousand if you're independent, you can call in two zero two seven four eight thousand two and we're going to open up a special line for people who work in the agricultural sector. If you work in the agriculture sector, we want to hear from you at two two seven four eight eight thousand three and keep in mind, we're always reading on Twitter at C-SPAN, WJ, and on Facebook and Facebook dot com slash C-SPAN. Now governor Bill Vilsek, how you were talking a little bit earlier about the fact that we have this trade imbalance in the culture sector with Canada Mexico, and frankly the world how bad is that imbalance in the agriculture sector between United States Canada Mexico right now? Well, I wanna make wanna make it clear. It's actually a positive benefit for the United States because we actually sell, we have a trade surplus, unlike a lot of aspects of our economy, where the rest of the world sells more to us than we sell to them and manufacturing, for example, in agriculture, we actually end up selling a lot more to the rest of the world somewhere between twenty to forty billion dollars, depending upon the year is a trade surplus that we've had every single year for the last fifty years and American agriculture and it speaks to the productivity of American farmers. They're able to produce more than we need here in the US, and it's an opportunity for us to showcase the benefits of the diversity of American agricultural, a lot of market opportunities opening up a lot of opportunities that, that could potentially be available assuming that we get things worked out with China. That's been a very difficult period for American agriculture, especially being producers who were selling anywhere from thirty to thirty five percent of the soybeans growing in this country. We're going to China. China that's been a very difficult time. It's been a very difficult time for soybean farmers. And at the end of the day while they certainly appreciate the administration's trait assistance program, farmers will always tell you prefer markets to, to aid to payments from the government from your current position. And as a former governor and former agriculture secretary, what do you think should be included with trae in trade policy that would best help to agriculture sector right now? Well, I think actually a couple of things focusing first and foremost on getting the US MCA the trade agreement between Mexico and Canada and the US ratified by the congress, that would obviously be of positive benefit incentive, positive signal to American agriculture. Secondly, it would be helpful if the administration could continue negotiations, which pan opening up an opportunity for a free trade agreement with Japan, when we pulled out of the Trans-Pacific Partnership, which was multi-nation trade agreement that was negotiated during the Obama administration. When the Trump administration pulled out of that agreement, it opened up opportunities for some of our competitors to have a market advantage in Japan into the extent that we negotiate a free trade agreement with Japan. That'll give us an opportunity to reenter that market aggressively, then finally probably longer term is trying to work out some arrangement with China. These are obviously difficult negotiations the administration's asking China to fundamentally change the way they do business. And obviously China's resisting that. And hopefully the rest of the world will side with the US and provide some help and assistance, and trying to make the case to the Chinese that it's in their long term best interests to basically play by by rules that are fair to everyone at the end of the day. However, this has been a tough situation. And if the president continues to ratchet up tariffs in China, no doubt they will continue to retaliate against American agriculture. We've seen in Daria significant drop off of activity in China. We've probably estimate between the situation in Mexico with steel aluminum tariffs and the situation in China that dairy producers and processors, probably lost somewhere between one and two billion dollars of revenue opportunities just in, in the period of time that we've been dealing with these tariffs, and that's going to grow and continue to grow. If we don't get some resolution with