Proposed trade agreement helps, but won't save Pa. dairy industry
The proposed trade agreement between the United States, Canada and Mexico increases Canadian access to milk produced in America, but won't solve all the problems facing the dairy industry.
That is the Pennsylvania Farm Bureau's reaction to the U.S.-Mexico-Canada Agreement, which President Donald Trump negotiated as an overhaul of the decades-old North American Free Trade Agreement.
The new agreement hasn't been formally approved by any of the three countries. It would go into effect in early or mid-2019 if the countries' leaders and governing bodies approve it this year.
“NAFTA has been extremely good for Pennsylvania and American agriculture,” said Mark O'Neill, communications director for the farm bureau's government affairs and communications division. “This new agreement provides more access to American milk to Canada without tariff. That is an increase over the past. There will be more access to our milk products.”
The agreement will help the dairy industry in Pennsylvania, but won't cure all of its problems.
“This won't be the silver bullet that saves the dairy industry,” he said.
Most state dairy farmers have smaller herds than farmers in California and other western states, making them more susceptible to economic pressures. The lack of overall demand and demand from schools are among those pressures,
“There is an oversupply of milk in the U.S. A number of factors contribute to that. Americans are not drinking the amount of milk they used to drink,” O'Neill said.
There is an effort under way to have whole milk removed from the calorie count of school meals so school districts can offer more varieties of milk in student lunches. Federal law currently permits schools to offer skim, 1 percent and chocolate milk.
“When only skim milk is offered in schools, no one wants to drink it. We want a bevy of milk — whole, 2 percent, 1 percent, skim and flavored milk. We feel we've been losing part of generation there as far as milk consumption goes,” O'Neill said.
The bureau is asking producers of “nut juice” made from almonds, cashews and fruits to stop marketing those drinks as milk.
“It's not milk. It doesn't have the same nutritional value. It's not milk flavored with almond. It's different. Many are higher in sugar than regular milk,” O'Neill said.
The size of dairy herds in the state is another factor. The average dairy herd is 80 cows. That is how may bureau President Rick Ebert has on his Westmoreland County farm.
“That's about the average size. Pennsylvania is last in the country in dairy herd size. That presents many challenges and pressures for farmers. Every milk check is critical. Large farms can weather changes better. The dairy industry in Pennsylvania has been struggling the last four years. Farmers are not making the money they feel they need to stay profitable. A lot of them are using equity in their farms to maintain business,” O'Neill said.
He said farmers who produce, process and sell their own milk are more protected from market pressures than those who sell their milk to processors and distributors.
The proposed trade agreement is intended to benefit all three countries.
“The thing about this trade agreement, there isn't supposed to be winners and losers. There's supposed to be winners and winners,” O'Neill said. “The two trading partners are the countries that Pennsylvania trades most with on agriculture. About 60 percent of our (agriculture) products goes to Canada and Mexico. It's important for us to have strong trade agreements with those two nations.
“Butler County dairy farmers are not immune to what happens in milk markets around the world. What happens in other countries also impacts what happens back home with Butler County farmers.”
