How Closing the Mexican Border Will Impact the Dairy Industry

For years now, closing the United States’ border with Mexico has been a high priority on President Donald Trump’s agenda. In March 2019, the Trump Administration threatened to close large sections of the border if the Mexican government did not take action “immediately” to stop illegal immigration to the United States. Almost one year later, this threat has ultimately not come into fruition. But even today the president appears to be as eager as ever to build a wall – both literally figuratively – between the United States and Mexico.

All of this begs the question: if the border between the U.S and Mexico were to be closed permanently, what effect would that have upon the dairy industry in the United States? Can ranch loans help farmers deal with these troubling issues? Here’s what you need to know.

What Are the Consequences of Border Closure?

Rampant overproduction and rapidly declining prices for dairy products in the United States have led to the most severe economic crisis for the dairy industry since the 1980s. Closing the border with Mexico, U.S dairy cooperative officials argue, would be yet another massive blow to the industry – from which it might not be able to fully recover.

Rick Smith, president and CEO of Dairy Farmers of America (DFA) recently summarized his concerns in a press release. “The dairy industry has worked together closely for more than two decades to grow and strengthen the market for U.S. dairy products in Mexico…Mexico remains a key customer for our dairy farmer-owners, and we are asking Congress to work with the administration to keep our border open and quickly ratify the United States-Mexico-Canada Agreement (USMCA) to ensure our robust trade partnership continues.”

Economic Concerns

To Smith, the fragile state of the U.S dairy industry is ample reason for the United States to reassess its approach to the U.S/Mexico border question. Other trade organizations have also voiced their concerns about how the closing of the border might further damage the dairy industry, as well as harm the U.S economy as a whole.

As a result, there’s an increase in demand for agriculture land financing. Farmers are using agriculture grants and refinancing programs to offset the loss in profit, and restructure their operations so that they can be prepared for the changes to come.

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At MSF Agriculture, we’re committed to working with farmers to secure their financial futures. Contact our office today to learn about ranch loans for farmers.