Dairy Farmers Hurt By Trade War

Aug 31, 2019
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We begin this hour with the economy - in a moment, why one big firm says that conditions may be more discouraging than people have even said. But first, more on tariffs - tomorrow, the Trump administration puts a 15% levy on more than $110 billion worth of Chinese imports - paintbrushes, seafoods, sweaters. As NPR's Jackie Northam reports, American farmers have been especially hard hit in the ongoing trade war, including dairy farmers.

JACKIE NORTHAM, BYLINE: Most any dairy farmer will tell you there's is not an easy way to make a living - hard work, low prices and fewer Americans drinking milk. The one bright light in recent years was exports, particularly to China, says Tom Vilsack, the head of the U.S. Dairy Export Council.

TOM VILSACK: In 2018, we were headed to a record year for the first five months of dairy exports to China for whey, protein concentrate, cheese.

NORTHAM: Vilsack, a former agriculture secretary, says that all began to change in June 2018 when Beijing retaliated against President Trump's tariffs on Chinese imports. He says U.S. dairy exports to China sank 54% in the first half of this year. Vilsack says part of that was a sharp drop in whey, which is used as feed for hogs.

VILSACK: We were supplying a lot of product for a hog industry that's been decimated in China by the African swine fever. So it's a combination of both of those things.

NORTHAM: Vilsack is currently in China meeting with government and agriculture officials to assure them that they are an important, long-term partner for the U.S. dairy industry despite the trade war. The drop in U.S. exports comes at a time when Chinese consumers are eating more cheese and drinking more milk.

CHAD BOWN: China is an important market for the dairy industry. And it was probably a market that had a lot of growth potential.

NORTHAM: Chad Bown is a trade specialist at the Peterson Institute for International Economics. He says that potential growth in China could be in jeopardy the longer the trade war drags on.

BOWN: The concern for American dairy farmers is, if they lose access to the Chinese market and Chinese consumers start to buy this stuff from New Zealand or Canada instead, they might like it. And they might stick with them even if the trade war is ever resolved. You know, they might not come back to the American farmers.

(SOUNDBITE OF COWS MOOING)

CHRIS POTTS: My great grandfather built. This is the milk house. All of our milking equipments. That's where the tank is that would store the milk until the truck comes to pick it up.

NORTHAM: Chris Potts' family has run the small dairy farm outside Purcellville, Va., for more than 100 years. He gazes at a herd of black and white Holsteins in the verdant pastures and talks about the trade war with China. He thinks the dairy industry will be able to ride out the storm.

POTTS: I think they have a lot more to lose than we do at this point. We can find other markets. You know, we have the safest, most plentiful food supply on the planet. And everybody wants it.

NORTHAM: Potts says he's glad President Trump has stood up and challenged the trade imbalances with China.

POTTS: For years, everybody's talked about it. But, you know, finally, something is getting done. And I hope it's resolved soon. But I do hope it - it needs to come out in our favor.

NORTHAM: But the stakes are high and likely to increase when President Trump slaps new tariffs on Chinese imports Sunday. Jackie Northam, NPR News Transcript provided by NPR, Copyright NPR.