Tuesday, June 26, 2018

Another way Trump tariffs hurt WIsconsin - cheese prices are collapsing

In addition to the news about Harley-Davidson moving some jobs to Europe, another significant Wisconsin industry is feeling the hurt from Donald Trump's trade policies - dairy farming. Things were already tough in the state, as evidenced by Western Wisconsin leading the nation in farm bankruptcies for 2017.

And then Trump proposed his tariffs, which led countries like Canada and Mexico to retaliate by putting duties on dairy products coming from the States. Ana Swanson of the New York Times recently came to our state and looked into the effect of those countermeasures other counties were throwing onto Wisconsin dairy products. In the article, the head of Sartori Company noted that not being able to sell products in other countries means that there is likely to be a surplus of cheese in America as a result, which could lead to a repeat of stuff you heard about in the days of the Great Depression.
“If export markets get shut off, I could see us getting to the point where we’re dumping our milk in the fields,” said Jeff Schwager, the president of Sartori Company, which has produced cheese in a nearby town for generations with milk it purchases from more than 100 dairy farms throughout Wisconsin. “It’ll be a big ripple effect through the state.”

The markets are already counting on a major plunge in cheese prices due to the effect of tariffs and the oversupply in the US over the coming months. The price for cheese to be delivered in August has gone down by 15% on the trading markets over the last month.

It was counties like Sheboygan, where Plymouth [the headquarters of Sartori] is located, that helped sweep Mr. Trump into the White House, and many people in Plymouth are still staunch supporters of the president. But many differ with his negative views of global trade, which has generally been good for the dairy industry.

Nafta, which the president often calls the worst trade deal ever, has given the industry a valuable foothold in Mexico. That country is now America’s largest export market for cheese, absorbing more than a quarter of all the cheese that leaves the United States. Dairy farmers and cheesemakers generally supported the Trans-Pacific Partnership, a 12-nation pact Mr. Trump withdrew from in his first days in office, which would have opened up valuable new markets, including Japan.

They have watched woefully as other countries move ahead without the United States, signing trade agreements that cut barriers to each other’s markets and put American producers at a competitive disadvantage. The European Union in April signed a deal with Mexico that is expected to slash tariffs on European dairy and offer further protections for European cheese names like feta, muenster, fontina and Parmesan, blocking American companies from using those labels.
Given that many dairy farmers and related jobs are in danger, what does our Fair Governor recommend to deal with this tough situation?

Seriously, that's his whole strategy.
Governor Walker also participated in Wisconsin Cheese Day by visiting cheese producers.

He stopped at the Center for Dairy Research in Madison and Great Lakes Cheese in Wausau.

When asked how consumers can help the dairy industry, Walker said "eat more cheese".
Let's see if Trump or Walker talk about the crisis facing dairy farmers in the state when they attempt to have their photo op to commemorate Foxconn's groundbreaking this week, and mention policy ideas that can help farmers get by in what looks to be an awful 2018 for that industry. Ah, who am I kidding? Neither of those guys have a clue or a care about this group of suckers people whose rural votes got these guys elected.

And yet these dupes still think these guys know what they're doing. Swanson talks to Scott Ditter, who owns a small farm in Sheboygan County and ships his milk to Sartori for them to use. Ditter supports Trump (and likely Walker) and claims that ultimately he'll be better off due to the Donald getting tough on trade.
Mr. Ditter said that Mr. Trump had the back of Wisconsin dairy farmers and that the president’s tariff threats were an effort to ultimately negotiate lower tariffs for American businesses.

“Maybe it’ll get the attention of these other countries,” Mr. Ditter said, as he stood in his field alongside a dozen dairy cows, each christened by his wife and their granddaughter with names like Julep, Chandelier, Thunder and Magic.
Oh, it got their attention, Scotty. And the tariffs they're putting on your products as a result will probably put yourself and numerous other small farmers out of business.

But hey- MAGA baby! Just remember to stop drinking for 12 hours before you pee in the cup for your unemployment benefits.


  1. Maybe you or one of your savvy readers knows if it is just cheese that has a tariff or if products that have cheese/dairy products also have tariffs? The tariffs affect specialty cheeses and regular cheese but what about say pizza? Most Sargento cheese goes on pizza and most Sargento cheese is made from milk bought from large CAFOs so I was wondering if the tariffs put all dairy at a disadvantage or just smaller dairy.

    1. Jeff kind of hits on it. The real problem is that prices will fall for everyone in the US if products can't go overseas, which hurts all US dairy producers. But especially hurt will be the little guys who have low margins, and can't use economies of scale to get by in tough times like CAFOs can, and they don't have the lobbying advantages to bend the law like Big Ag does.

      As to which products are tariffed? Depends on what the country imposing the duties wants to put it on. Could be all dairy, could be all cheese, could be just specific dairy products.

  2. Trump and his crowd still believe in the position of the US as the driver of world trade. It's simply not the case anymore. They're pushing a trade war as if it's 1955, and the US is the only manufacturing economy that's really up and running. Freaking delusional.

    When your adversaries don't need you, it's an uncommonly poor idea to crap on your friends.

    As for Wisconsin dairy, it's the remaining smaller operators who are going to be screwed as this plays out. The simply don't have the resources to survive a couple really down years after already suffering from years of low prices.

    Looks to me like crony capitalism consolidation time - the corporates win again.

  3. This is the same thing the Harley folks are saying - that they'll eventually be better off? Some kind of long game? I don't get it.

    1. No, just mediocre, mentally soft white guys who don't want to admit they backed a loser in Trump.

      They hope because they don't have the guts to ask real questions.

  4. It includes products with cheese like pizza and Quiche. Here is a link to the list. https://www.fin.gc.ca/activty/consult/cacsap-cmpcaa-eng.asp