U.S. dairy groups call on Trump to address Canadian dairy label requirements

Jan 13, 2017

Groups say Canada’s actions are in violation of NAFTA

By Diego Flammini
Assistant Editor, North American Content
Farms.com

The International Dairy Foods Association, National Milk Producers Federation, U.S. Dairy Export Council and National Association of State Departments of Agriculture wrote a letter to President-elect Donald Trump urging him to address dairy trade with Canada.

Last April, Dairy Farmers of Ontario implemented a strategy to create a new milk ingedient class, allowing Canadian ingredients to be more competitive domestically.

The letter to Trump suggests it’s costing companies in New York and Wisconsin about $150 million and that jobs are being lost on farms and in processing plants.

“In fact, the entire U.S. dairy industry is being hurt, as milk prices are being driven down nationally by Canada’s trade actions,” the letter says.

The groups say if Canada adopts a national ingredients strategy it could hurt the American dairy industry further and be in violation of NAFTA.

“The U.S. dairy industry is already restricted by Canada’s exorbitant tariffs and the limited market access granted under the North American Free Trade Agreement (NAFTA),” the letter said. “As one of our top trading partners, Canada’s flouting of its trade obligations is unacceptable.

“It is clear that these policies were implemented to intentionally block imports from the United States and are therefore in direct violation of Canada’s trade commitments under NAFTA and the World Trade Organization.”

In an email to Farms.com, Dairy Farmers of Canada said it continues to monitor the situation.

"We remain confident that our government supports the Canadian dairy sector," the email said. "The dairy ingredients strategy is a Canadian domestic initiative that is part of an effort by the sector to continuously respond to a changing market environment. Of course, the food processing industry in Canada will continue to be able to source its inputs domestically or through imports."

Video: Will the 2025 USDA December Crop Report Be a Market Mover/Surprise?

Historically, the USDA December crop report is a non-event or another dud report as the USDA reserves any final supply changes to the final report in January of the following year in this case 2026. But after the longest U.S. government shutdown in history at 43 days and no October crop report will they provide more data/surprise and make an exception?
Our China U.S. soybean purchase tracker is now at 26.6% or a total of 3.2 mmt but for traders it’s taking too long to unfold.
The final Stats Canada production report was bearish canola and wheat projection a record crop in both (it adds to the global glut of supplies) and bullish local corn and soybean prices in Ontario/Quebec thanks to a drought. It will not help the fund flow short-term, the USDA may need to offset it?
A U.S. Fed interest rate cut of another 25-basis point next Wednesday (probability 87.1%) could help fund flow and sentiment in stock and ag commodities into year end.
More inflows into Bitcoin this past week saw prices rebound back above 90,000 with support at 82,000 and resistance at 96,000.
A V-shaped bottom in cattle suggest the lows are in after Mexico reported another new world screwworm case. Lower weights, seasonal demand and higher U.S. beef select/choice values with a continued closure of the Mexican border to cattle will result in a resumption of higher cattle futures into yearend.
Australia is expected to produce its 3rd largest wheat crop ever at 36 mmt adding to the global glut of supplies.
Reports of ASF in hogs in Spain the largest pork exporter in Europe could see the U.S. win more pork export business long-term.
If the rains verify into next week of 3-5 inches for Brazil it would go a long way to fixing the dry regions from the last 2-months, but the European weather model has been wrong for the past 2-months!
Natural gas futures are surging to the 3rd price count as frigid hold temps set in.
CDN $ is also surging to end the week on a very resilient economy and better employment numbers suggesting no interest rate cuts next week.
Finally, the CFTC report showed funds were net buyers of soybeans but sellers of corn, canola and wheat. In real time the funds have gone back to selling as they take some profits.