VP Pence promotes USMCA as a win for California ag
California dairy is one industry that would benefit from the trade deal
By Kaitlin Washburn @Kwashy12
LEMOORE – Vice President Mike Pence visited a Lemoore farm last week to promote the United States Mexico Canada Agreement (USMCA) as a “win for American farmers and a win for American business and workers.”
USMCA, a trade deal that updates but doesn’t fundamentally change the North American Free Trade Agreement (NAFTA), was signed last November by leaders from the three countries and awaits congressional approval. The updated trade agreement would include new agricultural regulations, specifically for the dairy industry.
“I wanted to come to California, here in San Joaquin Valley, because you all understand the global impact of our agricultural economy and the need to have a trade deal with our American agriculture first, and that’s exactly what we’ve done,” Pence said.
About 800 people attended the event at Doug and Julie Freitas & Sons Farms on Wednesday, which was hosted by America First Policies, a nonprofit organization that promotes conservative policies. The event was a part of an ongoing series advocating for the passage of USMCA.
In Congress, the majority of Republicans are in favor of the trade deal. Before supporting USMCA, Democrats would like to see additional changes, such as labor and environmental reforms. It’s up to Rep. Nancy Pelosi, the speaker of the U.S. House of Representatives, to bring the agreement to a vote on the House floor this year.
During his speech, Pence said USMCA would “free up even more jobs and more opportunities in the city and on the farm, all across the San Joaquin Valley.”
USMCA would change parts of NAFTA, which was signed in 1994. For example, the process for addressing trade disputes remains intact, with a few additions. Some of the major changes include new requirements for automakers, stricter labor and environmental standards, intellectual property protections and digital trade provisions.
A significant update for the agriculture industry under USMCA would require Canada to open its dairy market to the U.S. dairy industry and do away with a pricing system on milk ingredients. American dairy farmers could sell more milk, cheese and other dairy products north of the border. Dairy regulations were not included under NAFTA.
Rob Vandenheuvel, senior vice president of member and industry relations for California Dairies, Inc., said the removal of Canada’s pricing system is the most beneficial aspect of USMCA for the cooperative.
One of the major dairy products that California Dairies exports is skim milk powder, one of the properties of milk, along with butter fat, extracted after it leaves the cow. The powder is found in food products like candy bars and protein mixes.
California is the largest exporter of skim milk powder in the world. The cooperative manufactures 650 million pounds of skim milk powder and 315 million pounds of butter. Of the skim milk powder, 60 percent is exported outside of the U.S., including Mexico, the cooperative’s biggest customer.
Canada also exports skim milk powder. Several years ago, Vandenheuvel said Canadians wanted more butter. When the Canadian dairy industry addressed the demand for butter, farmers were left with a surplus of the powder. To deal with the surplus, Canada artificially discounted the price of milk powder when it was exported from the country, Vandenheuvel said.
This made Canadian skim milk powder the cheapest option for California’s major powder customers, like Mexico, Southeast Asia and South America.
Under USMCA, the playing field would be leveled, Vandenheuvel said.
While USMCA does improve trade for the California dairy industry, Vandenheuvel said the United States is still behind other places, like the European Union, on trade agreements, which makes it difficult for the dairy industry to tap into other global markets.
California Dairies is the largest milk cooperative in California and the second largest in the United States.
The National Milk Producers Federation, a major lobbying group for the industry based in Washington, D.C., also supports the trade deal.
Jim Mulhern, the president and CEO of the National Milk Producers Federation, said in a news release USMCA would improve the dairy trade in North America and protect American dairy exports.
“USDA recently reported that our country lost an average of seven dairy farms a day in 2018 due to the poor economic conditions in rural America,” Mulhern said. “That’s a startling number, and reversing this alarming trend is what we should be discussing.”
Pence was the keynote speaker for the event, which also included a panel discussion with members of both the agriculture and manufacturing industries.
Pence also attended a private luncheon at Harris Ranch in Coalinga. The event was also a fundraiser for Trump Victory, a joint fundraising committee for President Donald Trump’s re-election, and the Republican National Committee. Tickets went for $2,800 a person, and additional support levels and meet and greets were available at $15,000, $35,000 or $70,000 a couple, according to a Fresno Bee story.
Ted McKinney, undersecretary for trade and foreign agricultural affairs for the U.S. Department of Agriculture, and David Valadao, a former U.S. congressman for California’s 21st District, also spoke. Valadao, a Republican, lost his seat in to TJ Cox, a Democrat, last November.
Curtis Ellis, the senior policy advisor for America First Policies, moderated the discussion. The panel featured Julie and Joshua Freitas from the Freitas Farm; Kraig Baron, the president of Western Saw Manufacturers in Ventura County; Steve Cozzetto, the president of Century Rubber in Bakersfield and Jeff Johnson, vice president of Harris Ranch Beef Company’s export division in Selma.