There is an expectation that when the North American Free Trade Agreement talks resume as early as Monday, dairy access could be a higher priority in the talks.
Recently, U.S. lawmakers wrote a letter to trade representative Robert Lighthizer to remind the administration of the desired changes to U.S. dairy access into Canada.
In the U.S., domestic demand is very important, but a 14% increase in first quarter exports of dairy products is welcome news. U.S. dairy producers see Canada as a chance for increased export growth at a time where exports account for only 14% of U.S. milk production.
Naturally, the Dairy Farmers of Canada and other dairy stakeholders take issue with any need for change, and feel that dairy market access is not be negotiated away.
According to an IPSOS poll released on Wednesday, Canadians support that position. The IPSOS poll, released on Wednesday suggests 75% of the respondents believe that the dairy supply management system should be defended. An even stronger number was that sixty percent of respondents believe that the extent to which the federal government will protect the interests of Canada’s dairy industry will have an impact on their vote in the upcoming election. In fact, 25% of the respondents stated, “it will affect their vote a lot.”
Clearly, the Canadian negotiators have little political room to compromise on dairy.
Earlier this week on RealAg Radio, Graham Lloyd, general manager of the Dairy Farmers of Ontario joined host Shaun Haney to discuss NAFTA negotiations, Canada’s dairy export plan, and why P5 (Eastern Canadian milk pooling) quota was pulled back 1.5% last week.
Q & A summary from the show:
RA: Do you feel the government will continue to protect dairy in the NAFTA talks?
GL: This government continues to protect us because this a system worth protecting. Canada imports five times what we export to the the U.S. Canada is not a solution to the U.S. dairy issue of over production.
RA: Why can’t the class 7 pricing be separated from supply management if that became a request of the Americans in the NAFTA talks?
GL: It was developed as domestic resource to price the skim components to be competitive with imports. We did not restrict imports. It is up to the processors to decide which products they want to use. It is based on that that we are seeing an increase in spending on processing and milk processing in Canada.
RA: Is Canada trying to compete in the global market with exports?
GL: Supply management is about a domestic model. We do not over produce. We do not increase production to chase export markets, but instead produce enough product to meet the Canadian demand. For example, recently quota was reduced by 1.5% in the P5 and we will review it again in three months and adjust further if required.
The Last Word:
“I do not want to sound like a broken record, but this is the only dairy system in the world that is thriving” — Graham Lloyd
American dairy farmers face large financial hurdles and doubts about their future
Dairy price study finds Canadians don’t pay more for milk
U.S. dairy subsidies equal 73 percent of producer returns, says new report