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U.S. Dairy Farmers React To New North American Trade Agreement


Dairy farmers are gathering in Madison, Wis., this week for the World Dairy Expo. Their meeting comes on the heels of the newly negotiated trade agreement between the United States, Canada and Mexico, the one that replaced NAFTA. And fixing the U.S. dairy market was a priority in that agreement. Wisconsin Public Radio's Hope Kirwan caught up with dairy farmers to ask how they're feeling about the new trade deal.

HOPE KIRWAN, BYLINE: I'm standing in the exhibition hall at the World Dairy Expo. Hundreds of people from across the country are checking out booths with everything from robotic milking machines to cow-themed artwork. The dairy industry has the latest and greatest on display today, but dairy farmers are still facing their fourth straight year of low milk prices.

KATIE ZIEMER: It's the biggest show where dairy cattle come together.

KIRWAN: That's dairy farmer Katie Ziemer. She says this year's expo comes as dairy farmers are facing the fourth straight year of low prices.

ZIEMER: It's what's going to make or break us. And hopefully with this new trade, it'll not break us. It'll help us keep continuing farming.

KIRWAN: The average dairy farm has struggled to make a profit for years. The price farmers are paid for their milk dropped from $26 for 100 pounds of milk in 2014 to just $16 now. So Ziemer and others here say the opportunity to sell more dairy to Canada under the new U.S.-Mexico-Canada Agreement could help U.S. farmers, though marginally. Last year in Wisconsin, dozens of farmers were left without a milk buyer when a regional company suddenly lost sales to Canada.

That's because Canada's dairy industry implemented a new pricing policy it called Class 7. The goal was to boost domestic sales. And that hurt competition from U.S. imports. While those sales only represented about 1 percent of Wisconsin's annual milk production, the shock of seeing farmers lose their buyers overnight sparked national efforts to oppose Canada's move.

By the time the Trump administration opened NAFTA negotiations, fixing the dairy market was a top priority. And it wasn't until Canada agreed to end the controversial policy a new trade agreement was reached. Mark Stephenson heads dairy policy analysis at the University of Wisconsin-Madison. He says the fight wasn't really about trade between the two countries. It was about other markets, too.

MARK STEPHENSON: Canada began to produce more skim milk powder under this Class 7 and sell that product overseas. And that began to compete directly with U.S. export sales.

KIRWAN: But David Wiens with the group Dairy Farmers of Canada argues that overproduction by U.S. dairies is a bigger issue.

DAVID WIENS: You know, Wisconsin produces more milk than all of Canada does. And so whatever access, you know, has been given to our market, you know, is not going to really change the surplus milk situation in the U.S.

KIRWAN: And some American farmers are starting to question whether the new trade agreement will really be all that helpful. Wisconsin dairy farmer Mark Heinze lost his milk buyer last year because of Canada's move. But he says fixing trade with Canada won't really help make his financial situation better.

MARK HEINZE: There are some pretty major problems in the dairy industry and in agriculture in general right now. So this a - certainly a Band-Aid and not a fix.

KIRWAN: Heinze cites issues like the nonstop growth of U.S. milk production and the disconnect between what farmers receive for their milk and prices at the grocery store. With the Trump administration calling the new trade agreement a big win for farmers, he worries that these systemic issues will be overlooked again once the trade deal is signed. For NPR News, I'm Hope Kirwan in Madison. Transcript provided by NPR, Copyright NPR.

Hope Kirwan left KBIA in September 2015.