Conn. dairy farms caught up in Trump trade war

Connecticut’s dairy farmers, who were caught in the middle of President Donald Trump’s trade wars with other countries this year, have received little money from a federal mitigation program meant to compensate them for losses.

They are hoping for more.

“It’s a drop in the bucket,” said Seth Bahler, co-owner of Oakridge Dairy Farm in Ellington, of the mitigation payments. “We’re hoping to get something. But right now, it’s like me giving you a dollar.”

The nation’s dairy farmers say the new tariffs the Trump administration has imposed on Mexico, China and Canada have cost them more than $1 billion in profits since May. The  U.S. tariffs provoked those nations to impose retaliatory tariffs on U.S. farm products, which hurt exports.

So, the U.S. Department of Agriculture tried to come to the aid of those farmers with a new, $4.7 billion trade mitigation program that has issued subsidy checks to make up for lost sales.

But only about $127 million was allocated for dairy farmers, an amount that makes up for less than 13 percent of the industry’s losses to date, according to the National Milk Producers Federation.

According to information obtained by the Environmental Working Group, Bahler’s Oakridge Dairy Farm received $26,964 from the USDA, the largest trade mitigation payment made to any farm in Connecticut.

Some farm owners in the state have received less than $50. Mitigation payments to all Connecticut farmers in the first round of subsidies, which the USDA began to disburse in August, totaled a mere $121,798.

Skating on thin ice

The state’s dairy farmers have been hurt by years of low milk prices. Dairy prices were  projected to rise this year, before the Trump administration issued new tariffs on aluminum and steel from Mexico, China and Canada, provoking those nations to counter with tariffs on U.S. goods.

“Projected gains began to evaporate,” said Alan Bjerga of the National Milk Producers Federation.

Joseph Cook, senior dairy analyst for Informa Economics, said the tariffs were imposed “at a time when U.S. … milk margins have remained at the lowest levels seen in years.”

“The impacts of the tariffs will continue to exacerbate lower margins for an industry seeing a high rate of retirement from small dairy farms,” Cook told FOX Business.

Bahler said his farm and most of the other dairy farms in Connecticut sell their products locally. But, as a whole, the U.S. dairy industry exports more than 17 percent of its product. Mexico was the largest importer of U.S. cheese. China was the biggest importer of U.S. whey. Now exports are down, producing a glut of milk and other dairy products on the U.S. market and driving down prices, Bahler said.

“The loss of the overseas market has hurt all dairy farmers,” he said.

In a letter to Agriculture Secretary Sonny Perdue, the National Milk Producers Federation’s chairman Randy Mooney, who is also a dairy farmer, said the first round of subsidies has done little to help the nation’s dairy farmers.

“We… applaud your desire to aid farmers through USDA’s tariff mitigation program,” Mooney wrote. “However, our members are greatly concerned about the level of aid that was provided in the initial effort…”

Perdue has promised the nation’s farmers a second round of trade mitigation payments before the end of the year.

Amanda Freund, a third generation dairy farmer in East Canaan, called the trade mitigation program “exceptionally disappointing.”

Her family milks 300 Holsteins at Freund Farms, which has received $3,918 in trade mitigation payments. That is less than the 12 cents-per-hundredweight of milk promised to dairy farmers, Freund said. She hopes a second round will bring the payments closer to what was promised.

With milk prices at $16.50 to $16.80 per hundredweight, the help the USDA is offering isn’t much, she said, especially in states like Connecticut where the cost of production is high and may exceed the price farmers receive for their products.

“We’re on thin ice,” she said. “You get to a point as a dairy farmer where you just think that you many have to cut your losses.”

Bjerga said he is hopeful there will be more money for dairy farmers in the second round of USDA payments, but isn’t sure there will be.

“You would expect something a little more in line with their losses,” he said.

Rep. Joe Courtney, D-2nd District, who represents many of the state’s dairy farmers, signed a bipartisan letter that will go to Perdue this week asking for more compensation for the industry.

“The second payment must better account for the significant damages dairy farmers have incurred and should exceed the $127 million payment made earlier this fall,” the lawmakers’ letter said.