DairyLine Broadcast: Implementing Import Tax Could Curtail U.S. Dairy Exports

The good news is that for the fourth straight year, U.S. dairy exports are setting new records. Worth nearly $2 billion annually and growing, our dairy products are purchased by over 100 countries, and we have a trade surplus. These exports are probably the biggest single factor driving record-high U.S. milk prices and have the possibility of sustaining strong prices for producers by providing outlets for our growing U.S. milk supply.

Over the next month or so, as we work with Congress to finish up the Farm Bill, it is going to be especially important that producers and processors focus on how policies in the Farm Bill can set us up for continued success in these export markets.

Unfortunately, the House-passed Farm Bill includes a dairy import assessment that may put these export markets in jeopardy. If included in the final bill, this assessment on imports creates a situation that invites our customers around the world to retaliate and stop buying our products. This is the wrong gamble to take in the face of a real success story in markets for our milk. In these times of greater trade, other countries are going to be looking at our dairy policies quite critically, especially a dairy import assessment that might violate our international trade obligations.

Funds from the dairy import check-off would not go to dairy farmers or reduce their check-off assessment. In fact, these funds would increase total assessments by less than 5% and could even result in support for import boards, rather than increasing demand for U.S. dairy.

It's just not worth risking the value of nearly $2 billion in U.S. dairy exports. Some of our leading destinations for U.S. dairy exports are countries that could implement the same kind of tax or limit our access to their markets.

The benefits of our growing export markets are real and making a tangible difference. This great news means we can continue to take advantage of our capacity to produce and innovate for new markets. It is the wrong time to support a shortsighted dairy import assessment that risks long-term growth and profitability for the U.S. dairy industry.

DairyLine is heard on more than 90 radio stations, and Saunders provides listeners with a processor perspective on industry issues during his broadcasts twice a month.

Posted September 10, 2007