Dairy producers respond to Trump’s attack on industry

Canadian dairy farmers say they won’t be cowed by criticism from other countries — or other Canadians — about their supply managed system.

However, they are getting weary of being under attack.

“It would be nice to not be the centre of attention,” said Dairy Farmers of Manitoba chair David Wiens.

The system set up in the 1970s to manage the supply of domestic milk, eggs and poultry has long had its critics. Countries such as New Zealand, Australia and the United States haven’t been shy about their anti-supply management opinion, particularly during trade talks.

At home, federal Conservative leadership hopeful Maxime Bernier made the end of the system one of his first policy priorities when he launched his campaign a year ago. Former Liberal leadership candidate Martha Hall Findlay has also said it should go.

However, the attack by U.S. President Donald Trump during a recent visit to Wisconsin heightened the rhetoric from all sides. While announcing a new Buy American policy, he said the North American Free Trade Agreement was a “disaster” and Canada’s dairy system “very unfair.”

“It’s another typical one-sided deal against the United States, and it’s not going to be happening for long,” he said.

That prompted David MacNaughton, Canada’s ambassador to the United States, to issue a letter pointing out that Canadian dairy farmers and policies aren’t causing the problems that American dairy farmers are currently facing.

“The facts do not bear this out,” said the letter.

MacNaughton pointed to a U.S. Department of Agriculture report that said the financial woes are a result of overproduction in the U.S. and globally.

As well, he said the U.S. dairy industry is clearly more protectionist.

“Canada imports 6.3 percent of its cheese, 10 percent of its butter and 10 percent of its milk powders, while the U.S. imports three percent of its cheese, three percent of its butter and eight percent of milk powders,” he wrote.

Prime Minister Justin Trudeau, when asked about the situation during a Bloomberg News interview, said the U.S. has a $400 million dairy surplus with Canada, and he repeated the government’s support for the sector.

“Let’s not pretend we’re in a global free market when it comes to agriculture,” he said.

Dairy Farmers of Canada spokesperson Isabelle Bouchard said producers are confident that the government will defend and protect the industry.

She said there is no formal NAFTA negotiation underway and that the Americans are using “alternative facts.”

“Let’s keep calm,” she said.

“The way Canada is responding to the U.S. on this is excellent. We might be small and we might be very polite, but we’re going to stand firm on our ground.”

That’s the plan for Wiens and his prairie counterparts Melvin Foth at SaskMilk and Tom Kootstra at Alberta Milk.

They all say that critics are either misinformed or missing facts.

“We’re not overly worried,” Foth said, but added there is concern anytime anyone starts to spread misinformation about how the system works.

Fluid milk is more expensive in New Zealand, he pointed out.

Trump and others have said a new milk class for components introduced in Canada has cost U.S. producers tens of millions of dollars.

In a statement, Kootstra pointed out that Canadian processors are buying Canadian ingredients at a more competitive price because the industry adapted to its changing market.

A policy note released by Agri-Food Economic Research Systems late last week said there is no evidence that changes in Canada’s domestic policy had affected U.S. producers.

In fact, said research lead Al Mussell, the value of U.S. dairy exports to Canada is increasing.

“The data show no dramatic change in the value of U.S. exports to Canada of milk protein isolates and diafiltered milk,” said Doug Hedley, who co-wrote the policy note.

“The U.S. has open access to the Canadian market in these products. There are no tariffs or volume restrictions applied on U.S. exports of milk protein isolates/diafiltered milk to Canada. It is a matter of U.S. competition with Canadian product in the Canadian market.”

At the Stampede Dairy Classic in Calgary, Holstein Canada president Orville Schmidt said people have to educate themselves about what supply management really means. It’s not about price, but supply, he said.

“People have to realize it is cheaper than water, cheaper than pop, cheaper than beer,” he said.

He added that dairy is likely only the first target of U.S. criticism among the supply managed commodities.

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