Michael Dykes, president and CEO of the International Dairy Foods Association (IDFA)

“We know free-trade agreements work.

“Over the last 30 years, we’ve seen a 20% increase in agricultural exports across all commodities in countries where we had free-trade agreements,” shared Michael Dykes, president and CEO of the International Dairy Foods Association (IDFA). “I’ve said it many times, I firmly believe the U.S. dairy industry can become the world’s leading supplier of affordable, sustainable dairy nutrition. I firmly believe it with every fiber in my body,” he continued in his address to those attending IDFA’s Dairy Forum.

U.S. dairy has made tremendous inroads in exporting dairy products around the world, growing dairy product sales from nearly nothing in 1995 to over 18% equivalent of U.S. milk production in 2022. However, stalled work on creating new trade pacts is holding back the industry and much of U.S. agriculture for that matter. As an example — while the United States entered the new United States-Mexico-Canada Agreement (USMCA), the Trans-Pacific Partnership (TPP) remains on the sidelines.

“The TPP would have been good for dairy. However, once the Trump and Clinton election campaigns took place, we no longer had the votes to pass it,” shared former House Speaker Paul Ryan at IDFA’s Dairy Forum.

As for TPP’s future?

“Dairy farmers, if you are for trade, you need to let your elected leaders know,” advised Ryan. “The best ‘China Policy’ for the U.S. would be to get back into the TPP,” continued the former one-time vice presidential candidate. “If the President of the United States got on the phone, we could be back in the TPP. Not being in that trade pact opens the door for China.”

Former House Speaker Collin Peterson also agreed that trade benefits both dairy and agriculture.

“I am an optimist. I believe we can move trade forward. I believe USDA Secretary Vilsack understands trade,” said Peterson, speaking later at Dairy Forum. “We do need to get President Biden to make it a priority.”

Trade pacts are not only important but so is trade with China as the country is the world’s leading dairy product and agricultural importer.

“The tone of the discussion on China needs to be brought down,” advised former USDA Secretary Dan Glickman, also speaking on trade in a joint panel with Peterson. “There are areas we can work together. If we are not careful, we are going to create a wall, and that will dramatically impact agriculture and agriculture exports,” advised Glickman, who also previously served in the House of Representatives as a member from Kansas.

Overall, economists agree that it’s rather impressive how the U.S. dairy sector is doing despite the lack of new trade agreements.

“It’s amazing how well our dairy exports have been doing without the TPP,” shared Rabobank’s Mary Ledman in a later discussion on the topic. “Think how much better exports could be with TPP.”

Ryan also reminded everyone of the importance of keeping a strong United States economy and federal government.

“Think of the advantage you have as a dairy exporter,” Ryan stated to the audience. “Goods and services around the world are traded in the U.S. dollar. If we don’t solve our country’s entitlement spending and long-term debt, that advantage could all go away because we are headed for a debt crisis.”

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(c) Hoard's Dairyman Intel 2023
February 9, 2023
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