As lead negotiators prepare for the fifth round of North American Free Trade Agreement (NAFA) negotiations this week, the U.S. dairy industry continues its efforts to breakthrough current barriers to exporting milk to Canada. Pushing for better access to Canada is a priority, but Mexico is the U.S. dairy industry’s top customer. It’s a market dairy leaders not only want to preserve, but see grow.
“Mexico is our most important market,” said Jim Mulhern, CEO of National Milk Producers Federation (NMPF) during Farm Journal’s MILK Business Conference. “It's over a billion dollars a year in sales, and if we didn't have access to that market or we had to pay the higher duties that used to be charged pre-NAFTA, we wouldn't have the exports we have there. It would be a serious harm to the U.S. dairy industry if we didn’t have NAFTA.”
Dairy may be a contentious issue within NAFTA, but dairy leaders say one thing is clear. Failure to renegotiate NAFTA is not an option.
“I don't think that's a result that U.S. agriculture is going to accept, and at the end of the day I think there are a lot of other industries that would feel very similar to this,” said former U.S. Department of Agriculture Secretary Tom Vilsack, who is currently the CEO of the Dairy Export Council. “I think the responsibility for the administration is to figure out creatively how to get the job done. They were right to raise the issue of modernizing and renegotiating NAFTA, but now they have to bring it home.”
“I think there's just too much here to walk away from,” said Michael Dykes, CEO of International Dairy Foods Association. “I think the administration knows that. I'm optimistic we can get there, and I know the administration is getting the message. I know Capitol Hill is getting the message. And I'm optimistic we'll get something done here.”
As the current administration reworks current trade deals, dairy leaders think agriculture is missing out on opportunities to build new markets.
“As we look at the future and we look at the milk coming at us and we look at the importance of export markets, we need to be looking at proactive Free trade agreements with countries around the world especially Asia-Pacific,” said Dykes. “The President is in Japan this week and Vietnam this week. There are places we need to be negotiating free trade agreements today.”
“Because if we're not, the EU is,” said Vilsack.
From trade to a Farm Bill, dairy leaders know 2018 will be full of challenges, but are hopeful those challenges turn into opportunities for dairy farmers.