The Canadian dairy farmers who need current incomes are facing doom.
It's highly likely that the negotiators will reach a deal on the North American Free Trade Agreement and that the deal will force dairy farmers to take a cut in pay.
The cut could come in several ways.
One way would be an increase in the volume of imports that are allowed at relatively low tariff rates.
Another way would be the loss of exports to the United States, especially products made from the new Class 7 price category.
A third way would be the loss of quota value.
And then there's the likelihood that the whole Class 7 setup will be put to a World Trade Organization complaint where Canadians would lose because the creation of this new class would be deemed an attempt to raise a new impediment to trade.
Canada previously lost a World Trade Organization case over pricing dairy products for export at the lower prevailing world price. It was deemed to be cross subsidization, using high prices for milk used for the Canadian market to offset losses on exports.
It's in this context that my friend and Ontario Farmer colleague Ian Cumming notes that Agropur, the largest dairy co-operative in Canada, is building its largest cheese plant in South Dakota.
Nothing like using investments by Canadian dairy farmers to build a plant on our stiffest competitor's territory.
