Fourth-generation California dairy farmer with 2,300 cows on trade war woes
Stephen Mancebo, a fourth-generation California dairy farmer with 2,300 cows, has battled ups and downs in his temperamental industry for a quarter-century only to find himself a casualty of a U.S trade war with one of his biggest customers - Mexico.
Mancebo, 47, represents one of approximately 1,300 dairy farm families eking out a living in California on the narrow margins of an enterprise that increasingly relies on exports.
For Mancebo and other U.S. dairy farmers and processors who turn milk into cheese, butter and other products, the trade war is threatening to snuff out a nascent rebound from three years of slumping prices that have driven nearly 140 California dairies out of business.
In retaliation for tariffs that President Donald Trump imposed on imports of steel and aluminum, Mexico in late May announced duties on cheeses, other farm products and metals from the United States.
Milk and cheese prices on the Chicago Mercantile Exchange, a key part of the formula that determines what dairy producers are paid, faltered immediately on expectations Mexico's tariffs would translate into U.S. surpluses.
The extent of export disruption has yet to be quantified. But sudden downturns in demand are challenging for dairy farmers, whose means of production need to be fed and milked on a daily basis.
"Our product is perishable. I can't sit on my milk for a month or two months," Mancebo told Reuters outside his dairy in Tulare, in California's Central Valley. "These cows can't be shut off."
After several years of showing little if any profit, Mancebo said he had been looking forward to a turnaround in prices that might have netted his operation $50,000 to $80,000 a month later this year, allowing him to break even for 2018.