It’s no surprise that Canada’s dairy supply management was discussed in the first face-to-face meeting between Canadian Agriculture Minister Lawrence MacAulay and new U.S. Ag Secretary Sonny Perdue. However, some of Perdue’s comments on supply management after the meeting on Monday are surprising or noteworthy with many on the U.S. side calling for the system to be dismantled.
Perdue seemed to emphasize the U.S. concern is mainly with the creation of the new Class 7 that makes ultra-filtered milk from the U.S. less competitive in Canada, and not so much about supply management in general.
“It’s not our purpose to try to manage or try to get involved in their internal supply management regarding the dairy industry,” he said.
“I made it very clear that the Class 7 designation we felt was an unfair undercutting of the U.S. industry that grew up south of the U.S.-Canada border. It cut these producers and this industry out of shipping the ultra-filtered milk into their cheese industry, which was in demand in Canada.”
“I also said, if you want to manage your dairy supply with supply management, that’s fine. You just need to manage it and not overproduce to create a glut of milk solids on the world market that’s being dumped at unfair prices,” said Perdue.*
Hang on. What?
“I also said, if you want to manage your dairy supply with supply management, that’s fine.”
It’s not like Perdue made the comments during an unguarded moment after being cornered by a reporter. These quotes come directly from a press release from the USDA (read it here). It would be safe to assume the words were carefully chosen and vetted.
People are paying attention to every word with NAFTA 2.0 negotiations around the corner. Maybe it’s reading too much into it, and it might not signal anything in terms of what will actually be negotiated, but the statement “if you want to manage your dairy supply with supply management, that’s fine” sends a different message than what President Trump conveyed in Wisconsin back in April and what Perdue’s predecessor Tom Vilsack and U.S. dairy groups have been calling for when it comes to Canadian dairy.
*(As a side note: given the small size of Canadian production and demand relative to U.S. or European dairy, it’s a stretch to blame Canada’s new milk class for creating the glut on the world market.)
We discussed the MacAulay-Perdue meeting and comments from both sides on RealAg Radio on Tuesday — listen here.