The Japanese are gobbling up more cheesy pizzas and proteins like whey, at the same time that its own dairy industry is seeing a decline. Exporters are aggressively competing to supply that growing demand, and the European Union has a leg up on the U.S. due to a trade agreement that went into affect at the end of last year. Other major exporting countries are set to benefit from the Trans-Pacific Partnership, a pact from which the U.S. withdrew.
The U.S. saw record dairy exports in 2018, said former Agriculture Secretary Tom Vilsack, who now heads the Dairy Export Council. But if nothing else changes, in a decade, half of the U.S.’ Japanese business will be wrested away by competitors. Two decades from now in 2038, American dairies will have lost $5.4 billion.
It’s not just Japan that U.S. dairy farmers are worried about. Trade spats with their No. 1 cheese customer, Mexico, and with China have led to lost sales. The pile of tariffs may begin to erode farmers’ support for the administration.