California’s dairy farmers were struggling to regain profitability. Then came the trade wars

For Gioletti and other members of California Dairies Inc., the state’s largest dairy cooperative and the second-largest in the U.S., the trade war with China has had a direct effect: “We no longer sell any products into China since the middle of this year,” says Rob Vandenheuvel, the co-op’s vice president of industry and member relations. That means the loss of 6 percent to 9 percent of its sales of milk powder. “We’re down to zero there.”Agriculture faces untold challenges all over the state, but dairy farmers arguably have a tougher time of it. Livestock has to be cared for more intensively than field crops. On top of the environmental restrictions confronting all farmers, dairies must deal with regulations governing methane, a greenhouse gas produced by cow digestion and bubbling up from the manure spread into pits to be dried for fertilizer. New state rules will regulate how much groundwater farmers can extract, posing another potential limitation on their business.Labor has gotten scarce. Even though Gioletti’s workforce is mostly foreign-born, it’s not immigration enforcement that’s causing the scarcity, he says, but demand from a surging construction sector that’s outbidding him. (He says he pays an average of $12 an hour, which doesn’t include benefits such as health coverage but does include free housing.)