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Perdue Tells Canadian Officials New Pricing Policy Undercuts U.S. Dairy

Jun 06, 2017
Secretary of Agriculture Sonny Perdue

U.S. Secretary of Agriculture Sonny Perdue this week completed a trip to Toronto, Canada, marking his first international trip as secretary. Perdue conducted a series of meetings with Canadian officials, including the Canadian Minister of Agriculture and Agri-Food Lawrence MacAulay and Premier of Ontario Kathleen Wynne, regarding several bilateral trade issues. Among other issues, Perdue raised the topic of American ultra-filtered milk that has been a point of disagreement between the United States and Canada.

“I was able to describe the issues that we feel are important to resolve – and can be resolved – as we begin to renegotiate NAFTA,” Secretary Perdue said, referring to the North American Free Trade Agreement in his statement issued after the meetings. “That has to do, obviously, with the dairy issue and the wheat grading issue that deals with feed grade wheat that’s not grown in Canada. And also certain provincial wine issues, where wines are not displayed out in front where other Canadian wine is.”

Perdue said the purpose of his conversations was to lay out issues of concern, not to “get involved in their internal supply management regarding the dairy industry.” He also noted that ultra-filtered milk was not included in NAFTA.

“And 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,” he said. “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.”

In February, Canada implemented the Class 7 pricing policy, which artificially lowers milk ingredient prices for Canadian producers, along with new price controls for dairy ingredients such as ultra-filtered milk. IDFA continues to urge administration officials and legislators who are working to modernize NAFTA to use the opportunity to improve market access to Canada and to tackle these protectionist policies.

IDFA will continue to work with Secretary Perdue and other Trump Administration officials to press for improved access for U.S. dairy exports to Canada during the NAFTA modernization process.

For more information, contact Beth Hughes, IDFA director of international affairs, at bhughes@idfa.org.

 
Dairy Facts 2016