While the benefits of international trade aren’t specifically called out on a farmer’s milk check, growth in the export market will ensure a strong dairy industry in Wisconsin and the U.S., according to state agricultural commodity leaders.
Exports provide a market for 15 to 17% of U.S. milk production, resulting in the equivalent of all the milk produced on U.S. dairy farms in one day of each week now going overseas, National Milk Producers Federation President and CEO Jim Mulhern said Sept. 1 during an AgTalk town hall webinar hosted by the U.S. Dairy Export Council and the National Milk Producers Federation.
“When I stand in front of room say, ‘If we don’t have exports, one day in seven of your milk doesn’t have a home now. Where does it go?’” said Chad Vincent, CEO of Dairy Farmers of Wisconsin, the farmer-funded organization that markets state dairy products. “Exports are an important piece of the puzzle. We have to continue to build demand. I think the more access that we get, the stronger we do internationally, the more competitive we can be.”
Since 1996, dairy exports have increased more than 600%, Mulhern said, adding that there is “tremendous potential untapped opportunity” for future exports but that the U.S. must move quickly to take advantage of those opportunities.
“In far too many markets we’re seeing growing opportunity gaps due to our competitors’ aggressiveness at racking up new trade partners,” Mulhern said. “The fact is from a trade policy standpoint, we’re actually falling behind our competitors, particularly the European Union, and the United States cannot let these opportunities with important markets slip away for dairy.”
Between 20 and 30% of everything grown, raised and produced in this country has to be exported, according to Tom Vilsack, who moderated the Sept. 1 AgTalk town hall. Vilsack, president and CEO of U.S. Dairy Export Council and previously the U.S. secretary of agriculture during the Obama Administration and governor of Iowa, said between 15 and 20% of farm income is directly related to those export sales.
“If we don’t export that much, essentially, many farmers don’t do as well as they possibly can do. And clearly exports are going to continue to take an ever increasing important role in the future,” Vilsack said.
The United States population represents roughly 4% of the consuming public globally, he said, so seeking trade opportunities with other countries gives the agriculture industry room to grow.
“It is important for us to have a discussion about trade and to make sure that the trade policy of the government is one that helps to support and sponsor agricultural trade,” Vilsack said. “Agriculture has been a bright spot for trade. Historically for the United States (agriculture) enjoyed a trade surplus for many many years. Not only do we help stabilize farm income with exports, we also create and support a number of jobs throughout the United States in processing facilities and export related jobs.”
In Wisconsin, 90% of the milk produced in the state gets turned into cheese and 90% of that cheese goes outside the state.
Sartori Cheese is an 81 year old fourth-generation family business that produces specialty cheese for the retail ingredient food service markets. Every day, Sartori purchases 100% of the milk from 87 Wisconsin family farms, said Sartori Cheese President Jeff Schwager, and their products are available in more than 50 countries.
“Any success that we have in the global markets though today is hard-fought,” Schwager said. “Fair trade on a bilateral basis would allow dairy to be even more significant to our economy and allow the farmers and processors to capitalize on their quality products and their efforts to be the best in the world.”
While Canada and Mexico are the largest importers of agricultural products from the U.S., Mulhern said a strong potential exists to meet a growing demand for dairy in Asia, North Africa and the Middle East with with American-made products.
Randy Romanski, Wisconsin Department of Agriculture, Trade and Consumer Protection secretary-designee, said getting a handle on the global coronavirus pandemic is key to strengthening and building on Wisconsin’s agricultural exports.
“Building and maintaining relationships is the single most important aspect of international business, and it’s best done in person,” Romanski said. “There’s really no substitute for (meeting face to face). We have to have the ability to gather travel safely to other countries.
“What we found is that companies can maintain existing relationships over the phone, but it’s extremely important for us to make new connections in person.”
Romanski said that entering 2020, with trade agreements in place and tariff issues starting to subside, there was some optimism that this year would be would be better for the agriculture industry than the past several years with low commodity prices have been.
Despite COVID-19, the ag industry has seen some growth and improving trends, Romanski said.
“We still haven’t made up for the losses that we saw in 2019, but these increases have been surprising and well-received,” he said.
Romanski said a trade deal with China and resulting exports starting to increase as China’s swine population starts to rebound and all three countries ratifying the U.S.-Mexico-Canada Trade Agreement were positive signs for the industry.
“We’ve seen just how interconnected our global community is. Keeping the food supply chain strong and dairy exports moving has never been more important,” Mulhern said. “America’s dairy future growth is really tied to the success of global markets. When global dairy prices fall, we feel that impact and prices here at home. When global markets rise, American dairy farmers, the American dairy industry, benefits.”
Vilsack said results of the AgTalk town hall webinar and a series of similar webinars will culminate in a report that can be delivered to the administration after the 2020 election to help guide future trade policy.
Vincent said it’s important for those involved in the agriculture industry to keep elected officials aware of issues impacting the community.
“Within Wisconsin alone, very few of the elected officials today come from an ag background,” Vincent said. “Ten, 20, 30 years ago, that wasn’t necessarily the case, so our ability to get in and educate and provide insights and provide information to these elected officials is really important.”
For more information about the AgTalk town hall webinar, visit www.agtalks.net.