Trump trade war with China takes toll on struggling Upstate NY dairy farmers

Syracuse.com

It took Kevin Ellis more than two years to navigate China’s trade barriers and win approval to export $25 million worth of dairy products from Central New York to the world’s most populous nation.

His persistence paid off in June 2018 when China allowed Cayuga Milk Ingredients -- a $101 million milk processing plant on the edge of Auburn -- to send its first two shipping containers of skim milk powder to Shanghai

But before the cargo ship arrived, the trade war President Donald Trump started with China hit home in Central New York: The Chinese announced they would impose retaliatory tariffs of 25% to 40% on U.S. dairy exports.

“When the tariffs went in place, we actually had our first shipment on the water,” said Ellis, chief executive officer of Cayuga Milk Ingredients.

“To go from New York to Shanghai is about 32 days, so we were able to clear the goods before the tariffs hit,” Ellis said. “But there wasn’t a repeat order because the tariffs basically made our product uncompetitive.”

Now the company, stung by the loss from China and uncertainty the trade war has caused in the global dairy industry, has decided to delay the centerpiece of a planned $89 million expansion.

The expansion would increase production at Cayuga Milk Ingredients by 35%, creating up to 80 new jobs, Ellis said. The company had planned to buy an extra 700,000 pounds of milk per day from local farmers.

The setback is the latest example of the toll the U.S. trade war in China is taking on Upstate New York.

As the international battle continues with no end in sight, the impact has trickled down from big corporations to small businesses and family farmers who are increasingly dependent on the global economy.

 

 

At Cayuga Milk Ingredients, the decision to delay the expansion will affect some 28 farmers at 30 locations across Central New York who are counting on new export markets to keep their farms in business.

The lost opportunity comes at a time when Upstate New York dairy farmers are fighting for survival.

New York lost almost 20% of its dairy farms between 2012 and 2017, according to a U.S. Department of Agriculture five-year census published in April. Read Full Article >

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