Farm equipment makers are reporting lower-than-expected sales for the first quarter of the Trump administration, amid uncertainty over President Donald Trump’s agricultural agenda.
The Trump administration is expected to cut back on payments to farmers in the near term, which would have a negative impact on dairy producers, according to the Association of American Feedlot Operators.
Trump has proposed eliminating a tax credit for dairy farmers, and the industry has lobbied Congress to keep the subsidy in place.
The dairy industry has been working with the Trump Administration to come up with a plan to reduce the impact of farm policy.
In its latest quarterly report on Wednesday, the Association said dairy farmers will receive a 1.75 percent cut in 2019, down from 1.95 percent the previous year.
The reduction is the second-lowest since the dairy industry began reporting quarterly results in 2017.
The industry will receive an average $1,000 drop in 2019 compared with the previous quarter, the association said.
In 2019, the group expects to save about $200 million on the purchase of equipment.
Dairy producers have been working to make up for lost sales during the Trump transition period, and a USDA report released last month found that nearly half of all dairy producers in 2019 were facing some sort of loss in 2019.
For dairy farmers who have lost sales, the outlook is less promising.
“In 2019, a lot of those are going to be small farms, so they’re probably not going to get the full impact, but it’s a big impact,” said Robert Graziano, a dairy operations director at the American Dairy Council.
Graziani said the reduction in 2019 is “fairly typical.”
“There are a lot more small farms that are going through the same process,” he said.
The USDA estimates the impact on the dairy sector will be “minimal,” but that will depend on the state of the economy and the type of equipment that is needed.
The Associated Press contributed to this report.