The U.S. receives about 3.59 per cent of the Canadian market
By Diego Flammini
Canadian dairy producers received the news early Monday morning that Canada and the United States reached a new trade deal.
But part of the agreement came at the expense of their industry.
As part of the trilateral deal with Mexico, the U.S.-Mexico-Canada Agreement (USMCA), which will replace NAFTA, the United States will receive access to about 3.59 per cent of the Canadian dairy market.
That portion of the dairy market is comparable to what Canada granted its CETA and CPTPP trading partners combined.
The concessions in those agreements equal about $250 million in annual dairy production, Dairy Farmers of Canada (DFC) said.
DFC learned about Canada’s deal with the U.S. last night and is disappointed with the government’s decision.
“The announced concessions on dairy in the new USMCA deal demonstrates once again that the Canadian government is willing to sacrifice our domestic dairy production when it comes time to make a deal,” Pierre Lampron, president of DFC, said in a statement today. “The government has said repeatedly that it values a strong and vibrant dairy sector (but) they have once again put that in jeopardy by giving away more concessions.”
In addition to the new market access for the U.S., the USMCA also has implications on Canada’s milk marketing.
“Canada shall ensure that milk class 6 and milk class 7, including their associated milk class prices, are eliminated six months after entry into force of this Agreement,” the trade deal says.
The Canadian Dairy Commission created the two classes to help producers market different types of protein.
Abolishing them could have significant impacts on dairy farmers, said Amanda Hammell, a dairy farmer from Bruce County, Ont.
“Not only did we lose our ability to compete in that market, we can’t even enter that market now,” she told Farms.com. “It’s going to cost us the same amount of money to produce milk, so there’s going to be a trickledown effect.
“With a cut like this, producers, processors and people involved in selling equipment are going to be affected to. Farmers are going to have to make significant changes to their building plans or, in some cases, decide to stop farming. I know, for my husband and I, we have very little wiggle room.”
Canadian dairy processors are also displeased with the federal government.
The Dairy Processors Association of Canada (DPAC) feels the government didn’t live up to its commitment of protecting supply management.
“Over the past year and a half, we have repeatedly heard our government state that it would stand up for the Canadian dairy sector,” Mathieu Frigon, president and CEO of DPAC, said in a statement today. “However, what was agreed to last night demonstrates very little support for our interests.”
The Canadian government defended its decision today and alluded to a compensation package for dairy farmers.
But details of any compensation won’t be revealed for the next few months, Foreign Affairs Minister Chrystia Freeland said today, The Canadian Press reported.
The U.S. wanted to dismantle supply management completely at the outset of the negotiations, Freeland and the Prime Minister said.
Canada's grain industry is pleased with much of the new deal.