Minnesota farmer Paul Fritsche can no longer afford health insurance as he struggles to sustain a dairy farm that has been in his family for nearly a century, Reuters reports.
With U.S. milk prices in the fourth year of a slump due to chronic oversupply, Fritsche, 58, is unsure whether he will be able to pass his 30-cow farm onto his sons and grandsons.
“Do you pull the plug? We’ve been at it for 90 years,” he said. “I’d hate to lose that.”
The dairy industry was a sticking point in the contentious renegotiations of the free trade deal between the U.S., Canada and Mexico that concluded last month.
U.S. President Donald Trump demanded concessions from the protected Canadian dairy industry and said on Twitter that Canada was hurting U.S. farmers with high tariffs. After Canada gave some ground, Trump claimed a big victory and said farmers would have more export options.
But Canada opened less than 4 percent of its dairy market to U.S. farmers - a concessions unlikely to make much of a dent in U.S. oversupply or improve the lot of farmers such as Fritsche, producers on both sides of the border say.
The U.S. Trade Representative - which negotiated the new deal that replaced the North American Free Trade Agreement (NAFTA) with Mexico and Canada - declined to comment. U.S. Agriculture Secretary Sonny Perdue said in a statement Friday that the deal will “crack open” additional dairy access and cited “significant victories” for U.S. agriculture.
In Canada, the dairy industry is faring much better and continues to be among the nation’s most profitable farm sectors, allowing most farmers to absorb the concessions’ impact. In addition, Ottawa has promised to compensate dairy farmers for losses stemming from opening up the industry.
Third-generation Canadian farmers Alain Philippot and Henry Holtmann are each preparing to bring their children into the business. They say the concessions sting and will limit growth. But the country’s protectionist system with its higher prices remains intact.
“I don’t think there will be a mass exodus” of farmers, Holtmann said. “There will be some leaving, but that’s because their business models weren’t flexible enough.”