Mitch Schulte, executive director of the Iowa State Dairy Association, says retaliatory tariffs from Mexico in answer to U.S. tariffs on Mexican steel are a major part of the problem.
“The dairy industry has been dealing with three years of low milk prices and as we started to see the light at the end of the tunnel and higher prices coming, we got hit with retaliation tariffs,” Schulte says. “That’s played a huge part of what’s going on in the dairy industry right now.”
Recent changes to the dairy margin protection program may offer some help for producers, according to Schulte.
“When you look back at the margin protection program, the formula that was in that program was wrong,” Schulte says. “It really just didn’t pay out the way that it should have. With the new changes, what we’re seeing is better payouts and more consistency to that program. It really is helping our dairy producers.”
Schulte says passage of a federal Farm Bill would help the dairy industry, but the major fix lies with the need to lift the steel and aluminum tariffs. He notes, Mexico is the Iowa dairy industry’s number-one trading partner.
“We need to do all we can to have that open free trade agreement that we had and not deal with those retaliation tariffs,” Schulte says. “A lot of the language that was in that agreement should, at some point, help our dairy producers but those retaliatory tariffs are still in place until they figure out what they’re going to do with the steel and aluminum.”
Iowa is the nation’s tenth-largest milk producing state. With the loss of 80 dairy farms this year, their number is now down to 1,070 dairies statewide.
Thanks to Jerry Oster, WNAX, Yankton