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Asks for second round of tariff mitigation payments
The following is the content of a letter sent to USDA Secretary Sonny Perdue:
September 18, 2018
The Honorable Sonny Perdue
Secretary
U.S. Department of Agriculture
14th and Independence Ave, SW
Washington D.C. 20250
Dear Secretary Perdue:
On July 13 of this year, I wrote on behalf of the Midwest Dairy Coalition to urge the
Administration to provide emergency assistance to dairy farmers to mitigate the economic
harms they are facing related to retaliatory tariffs from Mexico, China and other countries.
On July 24, you announced the broad outline of a $12 billion tariff mitigation plan for
U.S. farmers, including dairy farmers. Dairy farmers were initially encouraged by the
announcement. However, when the details of the plan were announced on August 27, that
encouragement turned quickly to deep frustration. The dairy assistance portion of the
package represents only a tiny fraction of the market declines dairy farmers have suffered
from the retaliatory tariffs.
We appreciate your interest in making a distinction between economic harm related to the
retaliatory tariffs versus normal market volatility. However, since the retaliatory tariffs
were announced in late May, milk futures prices through December of this year have
declined by $1.2 billion, and milk prices are estimated to be about $1.10 per
hundredweight lower than price estimates just prior to the imposition of the retaliatory
tariffs.
A recent study by Informa Economics projects economic losses to dairy farmers of $1.5
billion if the retaliatory tariffs remain in place through the end of 2018, and $16.6 billion
if the tariffs remain in place for the next five years. These declines are directly related to
the retaliatory tariffs and completely independent of any normal market volatility. As
such, the Administration’s announced Market Facilitation Program payment rate of 12
cents per hundredweight on half of a producer’s production history, representing only
$127 million in payments to dairy farmers, is woefully inadequate.
The rate of dairy farm loss in the Upper Midwest is quite alarming and very devastating to
the rural economy of our region. As the region of the nation with the most concentration
of dairy farms, many of our rural communities are deeply dependent on the economic
health of the dairy farms in the area. In Wisconsin alone, dairy farm losses through the
first nine months of 2018 have been about 40 percent higher than the average attrition rate
for the same nine-month period over the previous five years. The attached graphic from
the University of Wisconsin-Madison demonstrates that 2018 dairy farm loss trends have
been significantly worse than historic trends. The trade disruption and related market price
declines have greatly exacerbated those trends.
Therefore, we are requesting the Administration take immediate action to:
1) Commit to a second round of tariff mitigation payments to dairy farmers, to
Therefore, we are requesting the Administration take immediate action to:
1) Commit to a second round of tariff mitigation payments to dairy farmers, to be
available by the end of the year; and
2) Significantly increase the payment rate for dairy farmers to more fully reflect
market losses related to the retaliatory tariffs.
For the sake of dairy farmers and dairy-dependent communities throughout the Upper
Midwest and across the nation, we thank you for your urgent consideration of these
requests.
Sincerely,
Steven D. Etka
Coordinator
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