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Economic models show impact of Trump policies

Dairy economists at the University of Wisconsin have been modeling how retaliatory tariffs and program cuts will impact U.S. dairy farmers.  Leonard Polzin tells Brownfield UW’s Dr. Charles Nicholson has been calculating the effects of an equal 25% retaliatory tariff, cuts to the nutrition program, and changes in immigration policy. 

Polzin says food and nutrition programs like the SNAP program account for a large share of dairy consumption including 10% of fluid milk but program cuts would change that. “With food and nutrition policy, we can assume a 4% reduction in domestic demand for dairy products due to cuts in nutrition programs.”

Polzin says research shows farmers will lose workers with the Trump immigration policy, and that will also cost money. “We’re assuming that tighter immigration policy would have this restricting effect on labor leading to 20% higher wages and 10% lower productivity.”

Polzin says tariffs and export policies matter. “The U.S. exports nearly one-fifth of our dairy components, mostly in nonfat solids, so anything that hinders that definitely has this trickle-down all the way to the farm level on profitability and exports have been our main source of industry growth for about the past decade.”

Polzin says about 40% of the value of 2024 U.S. dairy exports came from shipments to Mexico, Canada, and China, the three countries targeted by President Trump’s new tariffs.