Canada and New Zealand Resolve Dairy Differences

Jul 18, 2025
By Jean-Paul McDonald
Assistant Editor, North American Content, Farms.com

Minor Dairy Policy Changes Expected

Canada has successfully resolved its dairy tariff rate quotas (TRQs) dispute with New Zealand under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

This resolution comes after close consultation with Canadian dairy stakeholders and demonstrates Canada’s strong commitment to its dairy industry and supply management system.

The Honourable Maninder Sidhu, Minister of International Trade, and the Honourable Heath MacDonald, Minister of Agriculture and Agri-Food, confirmed the agreement, stating that Canada remains dedicated to protecting its farmers, workers, and the communities that depend on them.

The agreement includes some minor policy adjustments in Canada’s TRQ administration. These changes are technical in nature and apply only to quotas under the CPTPP. Importantly, they do not alter Canada’s overall market access commitments or impact its supply management system.

With this mutual understanding, New Zealand has agreed not to pursue further action under the CPTPP dispute settlement process. The resolution showcases how both countries, as key CPTPP partners, used the agreement's mechanisms to address trade differences cooperatively.

Canada’s supply management system remains intact, ensuring continued support for the dairy sector. The technical changes ensure compliance with the trade agreement while safeguarding farmers' interests.

This outcome reflects Canada’s balanced approach in handling trade agreements — protecting national interests while promoting healthy international trade relationships.

Both Canada and New Zealand reaffirmed their commitment to working together on trade and investment issues within the CPTPP framework and other international platforms.

This resolution strengthens the trade ties between the two nations and highlights the importance of collaboration and dialogue in international trade matters.

Canada continues to stand firm on protecting its dairy industry while engaging positively with global trade partners.

According to the Canadian government, the changes will be published on October 1, 2025, for implementation beginning with the 2026 calendar year dairy TRQs.

Video: U.S.-China TRADE DEAL OR NO TRADE DEAL + Lower U.S./Canada Interest Rates Impact

Trump/Xi had a productive call today on trade, fentanyl, an end to the Ukraine/Russia war and TikTok but it looks like Chinese tariffs will have to be extended for an additional 90-days to mid-February of 2026 as Trump may not visit China until early 2026 and Xi will make a U.S. visit thereafter. They will still meet at the APEC summit in South Korea, but it does not look like a trade deal by than. It looks like the farmers will have a winter without China buying U.S. soybeans and will have to wait until 2026? The short-term momentum has turned bearish as we need to buy more time and soybean futures break back below all moving averages.
U.S. and Canada lowered interest rates this week with Canada’s 8th cut down to 2.5% while the U.S. Fed lowered interest rates for the first time in 9 months. Mexico and Canada are working closely together on trade ahead of the negotiations on USMCA review in 2026. The Canadian economy remains weak, so more cuts are most likely in the cards, and the U.S. Fed said 2 more cuts in 2025 and 1 in 2026. Do not fight the Fed or the tape!
A U.S. framework trade deal with Taiwan was announced with $10 billion ag purchases over 4 years but this is lower than their 2024 purchases. 2025 U.S. crop yields keep coming in lower than last year so that begs the question whether yields come in lower than last year's yields at 179.3 and 50.7 bpa. We will know more in the USDA Oct. 9th crop report.
Stats Canada provided a model-based August production update projecting higher wheat and canola crops as farmers are seeing better than expected yields with more than 50% of the harvest complete.
It remains dry in the ECB/South into the end of October in the long-term forecasts. The winter 3-month forecast is wet in the U.S. Midwest but dry in the south a typically La Nina forecast.
South American expected to get rain this coming week that could increase the soybean planting pace.
U.S. butter prices fall 38% to a 2021 low as excess supplies weigh on prices.