NY Governor Calls On Canadian Premier To Resolve Dairy Dispute

Nov 1, 2016

New dairy import policies being considered by Canada has prompted New York Governor Andrew Cuomo to write the Canadian premier highlighting the negative impact on both countries if Canada implements a National Ingredient Strategy.

Until recently, exports of ultra-filtered milk from the U.S. and New York have been duty-free.  In the past year Ontario implemented a new Class VI pricing policy that motivated Canadian processors to shift away from using U.S. dairy imports.  The Canadian federal government answered by announcing limitations would be placed on all dairy product imports through a National Ingredients Strategy.

In September, U.S. Senator Charles Schumer asked U.S. Agriculture Secretary Tom Vilsack to investigate whether such policies violate U.S.-Canadian trade agreements, including the North American Free Trade Agreement.

From October 26th to the 28th the Tri-National Agricultural Accord held its annual meeting in Ontario where U.S. representatives expressed concerns over Canada’s dairy trade plans.  Governor Andrew Cuomo penned a letter to Prime Minister Justin Trudeau noting that his administration had been working for months to resolve the issue.  Cuomo told Canada’s leader that he finds it unacceptable “for Canada to flout international trade agreements and devise strategies that unfairly harm a key export from New York.”
Bruce Krupke is Executive Vice President of the Northeast Dairy Foods Association, which represents dairy processors and manufacturers.   “What Canada’s doing is really snubbing their nose at these agreements and saying look we're going to put in place in one province in Ontario some new restrictions. And we think that if they do that it could potentially not go with agreements that are already in place. But what really happens with Canada’s policies is consumer unfriendly.”

Canadian/American Border Trade Alliance Senior Advisory Board Member Bill Owens is a former U.S. Congressman who chaired the House’s Northern Border Caucus. He says the dispute isn’t new, but rather has a significant history and could be related to other disagreements.  “There is more to this game than might initially appear. We have a very large dispute going on with Canada related to softwood lumber. And it's the Americans who are resisting an agreement that would allow Canadian softwood lumber into the United States. And it may be possible that if you resolve the softwood lumber issue you may be able to resolve the milk issue as well. Very few things can you look at in isolation and not understand that there may be something else in another part of the United States or Canada that's impacting the activities being taken by the governments.”
 
New York Farm Bureau Spokesman Steve Ammerman says the dairy industry in New York stands to lose millions of dollars in export revenues if Canada implements the trade restrictions.   “It's a product that many of our milk processors particularly in central and western New York make and rely on the Canadian market to sell their product. And it's essential that Canada live up to its trade obligations. Estimates are if Canada implements these trade barriers countrywide this could result in a $50 million dollar impact to New York’s dairy economy and that's significant especially in light of low milk prices right now that are threatening the viability of some of our family farms.”

The ultra-filtered milk at the center of the dispute is a powdered form of skim milk.  It is used as an ingredient to create other types of dairy products, primarily cheese and yogurt.