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Thankfully, “New Nafta” Has Saved Wisconsin Dairy!

Summary:
Ooops. Jumped the gun. Actually Nafta 0.8 will only yield minor benefit to American dairy farmers. In the meanwhile, prices are plummeting… Figure 1: November 2018 milk futures. Pink dashed line at Nafta deadline/agreement. Source: ino.com. From Dairy Herd Management (August): Another 382 dairy farms have left the business in Wisconsin this year through the first seven months of the year. That’s an attrition rate of 4.3%, and there are still five months to go. The negative impact is hitting all sorts of farms. From Wisconsin State Journal: Unlike past years, when just the smallest farms, with herds of 50 or fewer cows, were closing, some big farms with herds of more than 300 cows are also succumbing to the pressures of building debt with little equity, Basse said. “It all depends upon how

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Ooops. Jumped the gun. Actually Nafta 0.8 will only yield minor benefit to American dairy farmers. In the meanwhile, prices are plummeting…

Thankfully, “New Nafta” Has Saved Wisconsin Dairy!
Figure 1: November 2018 milk futures. Pink dashed line at Nafta deadline/agreement. Source: ino.com.

From Dairy Herd Management (August):

Another 382 dairy farms have left the business in Wisconsin this year through the first seven months of the year. That’s an attrition rate of 4.3%, and there are still five months to go.

The negative impact is hitting all sorts of farms. From Wisconsin State Journal:

Unlike past years, when just the smallest farms, with herds of 50 or fewer cows, were closing, some big farms with herds of more than 300 cows are also succumbing to the pressures of building debt with little equity, Basse said. “It all depends upon how many years you can endure negative margins,” he said.

Recalling that Wisconsin is cheese exporter, can one find succor by looking at cheese prices? No…
Thankfully, “New Nafta” Has Saved Wisconsin Dairy!
Figure 1: November 2018 cheese futures. Pink dashed line at Nafta deadline/agreement. Source: ino.com.

Menzie Chinn
He is Professor of Public Affairs and Economics at the University of Wisconsin, Madison

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