Don’t Bilk the Cow: Wisconsin Dairy Farmers Concerned with NAFTA Re-Negotiations

By Joe Knilans, Rural Affairs Advocate

President Donald J. Trump made modernization of the North American Free Trade Agreement (NAFTA) a priority of his administration. As a result, the Office of Advocacy is conducting NAFTA Modernization Roundtables across the country to engage small business owners, trade associations and local government entities.

The Office of Advocacy is conducting these NAFTA Modernization Roundtables to implement the Trade Facilitation and Trade Enforcement Act (TFTEA) passed by Congress in 2016. The TFTEA directs the Office of Advocacy to gather and report to Congress the views of small business of a possible renegotiated NAFTA agreement.

One of the locations chosen for these roundtables by the Office of Advocacy was Milwaukee. While in the state, the NAFTA team secured a site visit to a dairy farm and cheese factory.

The first farm visit for the team was the Crave Brothers Farm in the town of Waterloo. The Crave Brothers started this farm in 1980 milking just 57 cows. Today, they milk 1,500 cows and till 1,700 acres for crops. All of the milk that they produce on their farm is used in the cheese factory; additionally they purchase milk from a neighbor’s 800-cow farm. They also maintain a manure digester that produces enough electricity to supply their farm, the cheese factory and 300 neighboring homes.

Across the road from the dairy farm sits the award-winning Crave Brothers Farmstead Cheese Factory. Their cheeses come in many different forms: Mozzarella Cheese Rope, fresh Mozzarella Cheese and Mascarpone. Their cheese is sold in local grocery stores as well as nationwide chains such as Whole Foods.

One of the brothers’ concerns with re-negotiations of NAFTA is losing the open market with Mexico that many Wisconsin dairies have at this time. According to Mexico’s Ministry of the Economy, Trade and NAFTA Office in Washington DC, Mexico is Wisconsin’s second largest export market. That is an increase up from seventh in 1993. Wisconsin farmers exported to Mexico $176 million of soybeans in 2017. Wisconsin also leads the nation in the export of bovine semen, prepared/preserved cranberries and sweet corn according to the Wisconsin Department of Agriculture, Trade and Consumer Protection.

The Crave brothers were also concerned about restrictions with the Canadian market. They would like to expand into the Canadian dairy market; however, Canada has a central pricing sector due to this particular industry being excluded from the original NAFTA negotiations in the early 1990’s. The dairy prices have since been set by the Canadian Dairy Commission. Unfortunately, this tightens the market for U.S. dairy products for Canadian consumers, thus not allowing the Crave brothers and other American farmers to market their products in Canada as a viable competitor.

The second farm visit the team made was with Rosy-Lane Holsteins LLC, located in Watertown. Also attending this meeting were representatives from the Wisconsin Pork Association, the Wisconsin Farm Bureau and Edge (a Dairy Cooperative). Rosy-Lane has been owned and operated since 1965 by Lloyd and Daphne Holterman. Together, the pair milks 870 cows and tills 1,755 acres of crops. Rosy-Lane also exports and imports bio-science products with Canadian partners and is concerned that NAFTA renegotiations could disrupt this agreement. Mr. Holterman has recently visited Canada and feels that Canada is getting the best of the NAFTA agreement. His concern is with the central milk pricing that Canada implements. He feels that Wisconsin farmers are at a disadvantage to the highly subsidized milk industry in Canada. These concerns were also discussed by representatives from the Farm Bureau and the Dairy Cooperative when we met with them.

The representative from the Wisconsin Pork Association was also concerned that renegotiations could change the favorable agreements that they have with Canada and Mexico. Just as other industries in the NAFTA agreement, the Agra business has mixed feelings on modernization of NAFTA. Some feel it is working just fine and others feel it can be improved. We understand the importance of these issues and are working to gather and compile all of the relevant data from the nation-wide roundtables and will be forwarding this compiled data to Congress as mandated. We appreciate all of the input from the Wisconsin businesses and look forward to helping improve the business climate.

Advocacy was in Wisconsin for Regional Regulatory Reform Roundtable and NAFTA Modernization Outreach Meetings on March 15-16.

Can’t get to a roundtable near you? Fill out this form and tell us about your federal regulatory burdens. We will pass this information on to the appropriate agency and use it in the planning of upcoming Regional Regulatory Reform Roundtables. 

Joe Knilans is the Rural Affairs Advocate. He can be reached at joseph.knilans@sba.gov.