WASHINGTON, April 5, 2017 – The U.S. dairy industry is asking the Trump administration to get tough with Canada.
Three separate organizations -- the National Milk Producers Federation (NMPF), the U.S. Dairy Export Council (USDEC) and the International Dairy Foods Association (IDFA) – today urged the White House and governors of northern states to take action against Canada for “slamming the door to American dairy exports in violation of existing trade commitments between the two nations.”
The groups say Canada’s new “Class7” policy – creating a lower priced class of milk -- is expressly designed to disadvantage U.S. exports to Canada and globally. The “protectionist” policy, they say in a release, has already forced dairy companies in Wisconsin and New York to tell their farmer-suppliers that the Canadian market for their exports has dried up. For some farmers, this means that the company processing their milk and shipping it to Canada can no longer accept it starting in May.
“Our federal and state governments cannot abide by Canada’s disregard for its trade commitment to the United States and its intentional decision to pursue policies that are choking off sales of American-made milk to the detriment of U.S. dairy farmers,” said Tom Vilsack, the former U.S. Agriculture Secretary who is now president and CEO of USDEC. “It is deeply concerning that Canada has chosen to continue down a ‘beggar thy neighbor’ path of addressing its internal issues by forcing the U.S. dairy industry to bear the harmful consequences.”
Vilsack said that while farm families in the Northeast and Midwest are suffering the immediate consequences of the loss of Canadian markets, “thousands more will suffer if Canada persists in using its programs to distort the global milk-powder markets so critical to tens of thousands of American dairy farmers.”
The groups did not specify what kind of retaliatory action they are calling for. But they noted in their statement that the U.S. is Canada’s largest export market, accounting for approximately three-fourths of Canada’s total exports. And they urged both federal and state governments “to move swiftly to demonstrate to Canada that trade is a door that must swing two ways to have a functional relationship.”
Michael Dykes, president and CEO of IDFA, said total losses of ultrafiltered milk export from Wisconsin and Canada are estimated to hit $150 million. The protein-rich skim milk is typically used in the production of cheese and yogurt.
The Canadian dairy industry has said the policy is meant to provide a competitive option for Canadian dairy processors to imported U.S. product. Processors are under no obligation to buy Canadian skim milk or powder, as milk proteins enter the country free of tariffs.