Anxiety growing in US agriculture sector over tariffs

Concern among US farmers and processors has been increasing over recent days as the Trump administration tariffs take effect and trading partners respond with their tariffs in retaliation.

The US Dairy Export Council (USDEC) and the National Milk Producers Federation (NMPF) issued a statement highlighting that “exports are fundamental to the health of the US dairy industry”, with “one day's worth of milk production out of every six destined for international consumers”.

They go on to point out that over half of dairy export sales are to Canada, Mexico and China, which have been the first targets for US tariffs, and that they are “valuable trading partners that American agriculture depends on, and trade with those countries is critical to the well-being of dairy farmers”.

They also ask the countries involved to get concerns ironed out quickly so that trade can continue.

EU suggested as target

The organisations aren’t opposing tariffs per se, but are suggesting that they are put to work to drive “change with the trading partner that has brushed off US concerns for far too long – the European Union”.

The US has a long-held view that the EU uses standards for imported agri-food produce that are effectively a non-tariff barrier.

Meat and dairy products that have come from animals that have been fed added hormones to boost production are banned from the EU.

This, in effect, bars entry for much of US and Canadian meat and dairy production.

Farm organisation’s view

The American Farm Bureau, one of the two main farming unions, has also sought to influence the president’s tariff policy.

In a statement last week, bureau president Zippy Duval welcomed the decision to defer the introduction of tariffs on Mexico and Canada.

He acknowledged that “levelling the playing field was a worthy goal”, but highlighted that 20% of US farm incomes come from exports and that 85% of potash used on US farms came from Canada.

While avoiding criticising President Trump, the bureau was encouraging the administration to “continue working toward permanently resolving issues with Mexico and Canada to preserve important markets and to ensure farmers have access to the supplies they need”.

The National Farmers Union also expressed similar sentiments, with its president Rob Larew commenting that “American farmers and ranchers bear the brunt of tariffs”.

Labour

A further issue for US farmers that is in conflict with the administration's policy is the hire of farm workers.

Farmers and ranchers can employ seasonal labour from non-US citizens by securing an H-2A visa which allows access to the US for non-nationals to work on farms for up to 10 months.

According to the United States Department (USDA), this has become extremely popular, with the number requested and approved growing from 48,000 in 2005 to just over 378,000 in 2023.

Despite the availability of this scheme, in a farm labour report published at the start of this year, the USDA stated that between 2012 and 2022, 42% of crop workers lacked legal immigration status and held no work authorisation.

The US is clearly going through a period of trade turbulence, with tariffs being announced and deferred almost on a daily basis.

Assessing what the long-term plan for the Trump administration is cannot be done with any certainty. However, it is most likely that over time, they will assess what tariffs are likely to have the least consequences and concentrate on these and use others as a means of negotiating more favourable trade terms with trade partners.

Whatever about the risk to the wider Irish economy, for farmers the greatest concern revolves about what might happen with dairy. This is the category that does most export business with the US and while it survived a previous 25% tariff, it was for a relatively short period.

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