Tuesday, August 15, 2017

U.S. milk producers angered by Freeland

The National Milk Producers Association in the United States levelled a broadside against Global Affairs Minister Christia Freeland on the eve of the beginning of the negotiations to revamp the North American Free Trade Agreement.

Freeland said this week that she intends to retain supply management for Canada’s dairy and poultry industries.

The National Milk Producers Association says that’s heading in the opposite direction from most countries, including the U.S., which are reducing their government supports for their dairy industries.

It is particularly upset that the Canadian milk marketing boards have set up a new Category 7 to price milk low enough to displace imports of diafiltered milk.

The Americans say that has sharply increased Canada’s supply of skim milk powder and its exports.
The U.S. has already served notice that it intends to file a complaint with the World Trade Organization about the skim milk powder exports.

It earlier won a similar complaint about Canadian export, successfully arguing that they were only possible because Canadians can cross-subsidize the low-priced products from the high prices they receive for most milk.

Here’s what the association said:

“For too long, Canada has relied on government controls on farm milk production to boost prices, while minimizing dairy imports to limit competition. By comparison, the United States has slashed its government involvement in dairy markets, and relies on exporting its products to global customers to a greater degree than ever before.

“That’s why the United States and other major dairy exporting nations, including Mexico and Argentina, are so upset with Canada’s latest Class 7 pricing scheme that is designed to undercut world market prices and unfairly dump Canada’s surplus milk at the expense of the United States and other exporters. 

"Ironically, Canada’s so-called ‘supply management’ system is failing to manage supply. Despite having no domestic market for more milk solids, the government there has sharply increased farm level production quotas, resulting in an accompanying spike of almost 300 percent in Canadian milk powder exports in 2017 so far. 

"These exports are only made possible because Canada manipulates domestic pricing through the Class 7 subsidy scheme.”