US dairy farmers who are already struggling with low milk prices are worried that President Trump’s rhetoric about renegotiating the North American Free Trade Agreement (Nafta) and building a wall between the US and Mexico could damage dairy trade with its largest export market.
According to the National Milk Producers Federation (NMPF), 15% of milk produced in the US is exported and a third of that goes to Mexico. The milk powder, cheese and whey protein exported to Mexico is valued at $1.2bn (€1.128bn) – double the value of dairy exports going to Canada, the US’s second biggest market.
US dairy trade with Mexico has jumped by 558% since the Nafta agreement was signed in 1994, according to the US Dairy Export Council (USDEC).
Last week, Trump promised “pleasant surprises” from planned renegotiations of Nafta, an agreement he has called the worst deal in history. Trump said Nafta puts US workers at a disadvantage.
Dairy economist with the University of Missouri, Scott Brown, said: “Anything that happens that reduces the ability to trade products to Mexico will be troubling for dairy producers in the US.”
He also said: “Can we renegotiate and get a better Nafta deal? Only time will tell. Those trade agreements traditionally have taken a lot of time and effort to get everybody on the same page and we know we’ve benefited tremendously on the Nafta agreement we have.”
NMPF and USDEC travelled to Mexico city in March to meet with Mexican dairy leaders to reinforce its commitment to continue working with the country.
Jaime Castaneda, senior vice-president for domestic and international policy for NMPF, said: “We see Mexico as a partner, not necessarily just as a customer.”
He will be hoping President Trump will see the bigger picture.
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