Dairy Farmers of Canada weighs in on NAFTA renegotiations

By Jim Cornall

- Last updated on GMT

The president of Dairy Farmers of Canada said more US dairy product is exported to Mexico and Canada than anywhere else in the world.  Pic: ©iStock/Magone
The president of Dairy Farmers of Canada said more US dairy product is exported to Mexico and Canada than anywhere else in the world. Pic: ©iStock/Magone

Related tags Milk International trade

Earlier this year, after some prompting from dairy producers and organizations in the US, President Trump pointed to Canada's dairy system as one that harms American dairy farmers.

However, according to Wally Smith, President of Dairy Farmers of Canada, the numbers paint a different picture.

Impact goes both ways

Smith, who was in Washington, DC, last week, told DairyReporter he was in the US capital to discuss potential impacts on the Canadian dairy industry if NAFTA gets re-opened – and how it might also negatively impact the US dairy industry.

“We're here to say that the US already has huge market access into both Canada and Mexico under NAFTA and that the dairy trade between these countries is all in the US' favor,”​ Smith said.

“US exports into the Canadian market are five times greater than the exports from Canada into the US. There is more American dairy product exported into those two markets than anywhere else in the world, including China, and people need to know that.”

Population disparity

He pointed out the population of California alone is greater than the population of all of Canada, and the same goes for the bovine population.

“The number of cows in Wisconsin is greater than all the animals in Canada, so there's a huge disparity there,”​ he added.

While Smith said he had not experienced any anti-Canadian sentiment while in the Washington, there were questions about how the Canadian dairy industry works, and about US exports to Canada.

Some US dairy groups said Canada is violating the NAFTA trade agreement and that US dairy processors are suffering due to Canada closing a loophole​ through which US exporters were selling ultrafiltered milk.

“It is an opportunity for us to explain the situation, to inform the American public that the Canadians are not involved in the export market. I think only 0.3% of Canadian production is traded internationally, Americans need to know that.”

More or less opportunity?

He said Americans need to know they already have a very lucrative market in Canada, and a very lucrative market in Mexico.

“I would suggest that if we are to tweak – as President Trump has said – NAFTA or renegotiate NAFTA, that the Americans might be concerned that they have less opportunity into those two lucrative markets.”

Caring about other farmers

Smith said he, and Canadian dairy farmers, are very sympathetic to the plight of the US farmers, as they are to farmers in the UK.

“I've been following a long time now some of the blogs from farmers that are writing about how the low prices are affecting and impacting on family farms and their operations.  None of us like to see each other in any kinds of difficulties,”​ he said.

“The world is saturated with milk, and milk products, and the prices are horribly low.

“And if the Americans thought that opening up the Canadian market to their production would lift them out of their level of low prices, I think they need to have a second sober discussion around that issue.”

Supply managed system

Canada has a supply managed system, which means that Canadian dairy producers only produce the milk forecast for their domestic market. 

“Our government in Canada, as well as other political parties in Canada, as well as the Canadian public, are very supportive of supply management.

“There is no subsidy from government, we don't export into the international market, we don't do any dumping, so I want to go back to my earlier point - if you take all those factors, and you look at the enormous opportunities that American dairy producers already have providing products to the Canadian and Mexican markets, my question is, “What more do they want?””

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