Milk

US dairy farmers have it tough. Milk prices have tanked and show little sign of rising. I know dairy farmers who struggle to stay afloat.

Dairy tariffs were recently a hot issue between the US and Canada. I'm partial to the dairy business, so this dispute was of interest. My first jobs out of high school were on dairy farms not too far from the border with Canada. (I still believe the smartest boss I ever had—and there have been several brilliant ones—was a dairy farmer.)

Clearly, we were being gouged by Canada, right? Tariffs of 245 percent on cheese and 298 percent on butter sure seem oppressive.

Except that we weren't paying them. Canada limited how much we could sell to their markets. If we sold more than that, we then paid the high tariffs. But we mostly didn't sell above that limit, so we weren't paying the tariffs. And we still had a $650 million dairy trade surplus with Canada. By Mr Trump's logic, Canada should impose trade restrictions on us. Instead they opened up more of their market to the US: 3.6 percent.

Canada regulates their dairy industry. As reported by NBC News, Canada employs a "system to enforce domestic production quotas as well as limit its dairy imports and exports, which keeps prices steady and guarantees farmers a stable income." The cap on what the US could sell to Canada was part of their plan to prevent prices from dropping too low, hurting the farmers. That cap is now expanded under the updated NAFTA agreement (excuse me, that's the USMCA), but it is still in place.

What about US policy? We have used import barriers, export subsidies, and buying surplus dairy products but have not limited production. Some farmers saved their farms, and changed their way of life, by accepting buyouts of their herds. Farmer cooperatives are sometimes part of the problem, rather than a solution. For example, Dairy Farmers of America shuts out farmers in some areas of the country to benefit those in others, according to the NBC report referred to above.

I recently read the novel Driftless, by David Rhodes, set in rural Wisconsin. One of the plot lines involves a small-farm family, the Shotwells, fighting city hall and the dairy cooperative that corrupts it. This is fiction, but its point that family farmers are being roughed up is real life. The Shotwell story is reminiscent of that of the Kentucky farmers interviewed by NBC.

Some farmers innovate and manage to get through the times when milk prices plummet. Not all have that opportunity. Even larger farms, with more cows than the family can milk by themselves, struggle to survive. They hire low-wage, undocumented immigrants to milk the cows. Congressman Devin Nunes' family, notably, moved their farm from California to my old hometown of Sibley, which is in anti-immigration Congressman Steve King's northwest Iowa district, where they could get lower-cost labor. The Nunes family won't admit to hiring undocumented workers; they refuse to answer any questions whatsoever and intimidate those who ask. But the locals know.

I suspect that many, perhaps most, US dairy farmers would welcome policies like Canada's, which  protect farms by regulating production and guaranteeing fair prices. They might consider these preferable to pushing our policies and price fluctuations onto Canadian farmers.