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Opinion

USMCA: NY Dairy Farmers’ Livelihoods Could Depend on Congress Passing USMCA

March 4, 2019

https://www.uticaod.com/opinion/20190302/guest-view-milking-states-dairy-farmers-must-end

Mike McMahon is a dairy farmer in Homer. His parents started farming there in 1957.

UTICA OBSERVER DISPATCH – March 3rd 2019

For farmers across upstate New York there is nothing more important Congress can do than stabilize our relationship with our Northern neighbor by quickly passing the U.S.-Mexico-Canada Agreement or USMCA.

This agreement modernizes the North American Free Trade Agreement (NAFTA) and it’s essential to protecting the ability of New York farmers to export goods to Mexico and Canada. Canada is the second largest market for US products being exported, and Mexico is the third largest.

I am watching this issue unfold from my dairy farm in the Cortland County community of Homer, where I manage 800 milk cows on 2,300 beautiful acres. Right now, we are dealing with milk prices that are in the fifth year of being below the cost of production. What that means is we are selling milk for $16 dollars per 100 pounds of milk, but our cash cost is running about $16.50 per 100 pounds of milk. That cash cost doesn’t include our expenditures for things such as new equipment.

New York dairy farmers need to export about 17 percent of the milk we produce to balance the domestic and international markets. Most of our milk goes to Mexico, but that export is down about 15 percent this year. Making all this worse is the fact that milk prices in the U.S. are tied to how much cheese the government has in storage. Right now, the country has 1.4 billion pounds of cheese on hand while 40 million Americans are in a food deficit situation. That number is depressing milk prices.

These numbers are troubling, they are also hard reminders that American dairy farmers simply must have access to trade partners in Mexico and Canada. It’s also critical that our dairy processors are also able to access these markets. An entire supply chain counts on it.

As milk prices fall, Congress will soon be debating the passage of USMCA. The discussion could not be coming at a more critical time as the on-going trade war with our trusted partners in Mexico and Canada has resulted in pain on both sides of the borders. Uncertainty coupled with tariffs have seriously hurt New York farmers who work every day to create jobs and economic growth. The tariffs or better yet taxes, also impact the price of our equipment and other critical inputs which means other members of our community are impacted.

Farmers need a win and we need it soon. We need Congress to approve USMCA so we can provide some market stability and make strategic decisions about the future. We need Congress to put aside differences and act in a bipartisan fashion to protect the long-term trade relationships that have been built in North America over decades.

Time is of the essence because as bad as all this seems there are worse options on the horizon. The worst case scenario happens if the US fails to pass the USMCA and leaves NAFTA all together. The impact of that would be catastrophic with New York seeing a 15 percent overall drop in exports and a loss of 117,000 jobs. This would devastate the market for the $2.4 billion dollars in products that New York is exporting to Canada each year, and the $859 million in New York products going to Mexico.

In Homer and dozens of other small farming communities across New York, we believe our elected officials in Washington, D.C. need to fight to approve this agreement and do away with the punitive tariffs. Our state’s economy is inextricably linked to strong trading relationships with Canada and Mexico and our farmers’ livelihoods depend on it. Please take a moment and call your member of Congress to remind them that hard working New York farm families are counting on them. Hundreds of small dairy farmers in New York are on the verge of shutting down. It’s time we all stand up and make our voices heard.

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