US-Canada Trade War

[mike]

Have any of you Canadians known of the current trade war over certain milk products? It may help explain the depressed state of the cheese market recently. The governors of WI and NY are claiming that 70+ of their states' family farms are at risk of going out of business as a direct result of the new tariff.

It does seem to me that if Trump is going to go all protectionist, he can hardly expect our neighbors to act differently.

http://www.reuters.com/article/us-usa-t ... SKBN17K2L5

U.S. President Donald Trump promised on Tuesday to defend American dairy farmers who have been hurt by Canada’s protectionist trade practices, during a visit to the cheese-making state of Wisconsin.

Canada's dairy sector is protected by high tariffs on imported products and controls on domestic production as a means of supporting prices that farmers receive. It is frequently criticized by other dairy-producing countries.

"We're also going to stand up for our dairy farmers," Trump said in Kenosha, Wisconsin. "Because in Canada some very unfair things have happened to our dairy farmers and others."

Trump did not detail his concerns, but promised his administration would call the government of Prime Minister Justin Trudeau and demand an explanation.

"It's another typical one-sided deal against the United States and it's not going to be happening for long," Trump said.

Trump also reiterated his threat to eliminate the North American Free Trade Agreement (NAFTA) with Canada and Mexico if it cannot be changed.

U.S. dairy industry groups want Trump to urge Trudeau to halt a pricing policy that has disrupted some U.S. dairy exports and prioritize dairy market access in NAFTA renegotiation talks.

"A WTO complaint would be a last resort because it would take five or six years to come to any resolution," said Jaime Castaneda, senior vice president for the U.S. Dairy Export Council.

Canada's dairy farmers agreed last year to sell milk ingredients used for cheese-making to Canadian processors, which include Saputo Inc and Parmalat Canada Inc [PLTPRC.UL] at prices competitive with international rates. The pricing agreement was a response to growing U.S. exports of milk proteins that were not subject to Canada's high tariffs.

Canada's envoy to Washington on Tuesday sent a letter to the governors of New York and Wisconsin - both major dairy states - saying U.S. producers' problems stemmed from overproduction rather than Canadian policy.

Industry groups in New Zealand, Australia, the European Union, Mexico and the United States complained the new prices for Canadian milk ingredients under-cut exports to Canada.

"President Trump's reaction is not surprising. He is defending his domestic dairy industry," said Jacques Lefebvre, CEO of Dairy Processors Association of Canada. "Further communications with the Canadian government will broaden his perspective."

The Dairy Farmers of Canada said it was confident Ottawa would "continue to protect and defend" the dairy industry.

http://fox11online.com/news/state/wisco ... lp-on-milk

KENOSHA (AP) -- President Donald Trump is promising to find a solution to a trade dispute with Canada that has left dairy farmers in Wisconsin and New York without a market for their product.
Trump said during a speech in Kenosha on Tuesday that Canada has been "very unfair" to dairy farmers and "we're going to start working on that."
Canada has decided to impose import taxes on ultra-filtered milk, a protein liquid concentrate used to make cheese. It had been duty free but Canada changed course after milk producers there complained.
About 70 dairy producers in both Wisconsin and New York are affected.
Trump promises to work with Wisconsin's congressional delegation, including House Speaker Paul Ryan, to get a solution.
Republican Wisconsin Gov. Scott Walker and Democratic New York Gov. Andrew Cuomo sent Trump a letter on Tuesday urging him to take action.

[Bootstrap]

No whey!

Are we going to be invaded by curdish fighters now?

[mike]

Maybe the American farmers could moooove to Canada.

[lesterb]

Maybe the American farmers could moooove to Canada.

About 75% of the dairy products we buy in Canada are from the US, according to one source I read this morning. What more does he want - 100%?

The US problem, plain and simple, is over-production.

[ohio jones]

The US problem, plain and simple, is over-production.

The Canadians do have a problem of under-consumption, though, eating far less cheese per capita than those of us in the US (most of the difference is probably American cheese). If y'all would copy the cheese-eating habits of the French, instead of just their language, imported products would be welcomed instead of restricted.

Make Canada Grate Again!

[Bootstrap]

When does the next episode of 22 Minutes come out? Surely this is going to be featured ...

[mike]

The US problem, plain and simple, is over-production.

The Canadians do have a problem of under-consumption, though, eating far less cheese per capita than those of us in the US (most of the difference is probably American cheese). If y'all would copy the cheese-eating habits of the French, instead of just their language, imported products would be welcomed instead of restricted.

Make Canada Grate Again!

Well that certainly figures. I was just in Ontario and have it directly from the Canadians that their cheese is mostly quite inferior to that of the U.S. Also much more expensive. Must be the reason for the under-consumption.

[mike]

Maybe the American farmers could moooove to Canada.

About 75% of the dairy products we buy in Canada are from the US, according to one source I read this morning. What more does he want - 100%?

The US problem, plain and simple, is over-production.

Before the new tariff, it wasn't over-production, it was just meeting demand. Now that the door has slammed shut, of course there is over-production. Somebody in Canada was buying the American milk product because it benefited them somehow. Now, they are buying it from Canadian farms likely at a higher price. So, Canadian consumers will be paying the difference somewhere somehow.

As another friend of mine pointed out, the U.S. subsidizes dairy and grain farmers heavily allowing them to sell milk for less than the actual cost of production. I'm not saying that this is fair either, especially to Canadian farmers who can't compete. So in that sense, turnabout is fair play. If the US is going to subsidize its milk, it's to be expected that Canada slaps them with tariffs. Either way, you have governments kowtowing to farmers who have their hands out for subsidy checks.

The bottom line is that Canadian farmers are smiling while Canadian consumers will probably pay a bit more because of this particular spat. And American farmers are whining to Trump while American consumers gobble up cheap cheese.

The last few weeks I'm able to literally buy good quality cheeses like cheddar, colby, mozzarella, provolone, etc at wholesale for in the $1.79 per pound range. Price levels not often seen.

[Josh]

I realise what I am saying runs contrary to the goals of global capitalism, but perhaps we should consume dairy products and cheese made locally to us - in our own state or even our own town.

Of course, then it would be a lot harder to make millions of dollars

[appleman2006]

As I understand it, it is not a new tariff that caused the problem. Rather our rules changed so that dairies could buy our own milk here for the global world market price. So of course they stopped buying American milk that due to your high dollar was going to cost them more.

What more or less happened in lay man's terms is that the dairy board here saw that they were going to probably lose there supply management system as we know it anyway and so made changes that enabled farmers to produce far more milk here and meet the actual demand that we have.

Trump is trying to suck and blow at the same time. He wants protectionism but then cries foul when other countries do not buy from America but rather produce enough to meet there own needs. He is going to find out in a hurry that he cannot have it both ways.

I am not a big fan of our supply management system. I find it innovative prohibiting and while we do produce some good cheese here it is really really expensive. But I do believe at least here in Ontario the dairy board is starting to see the light. What we do have at this point is a lot of very well established milk producers with some really nice operations that are prepared to expand operations big time if they need to.

I feel bad for Wisconsin's dairy industry. But seriously nothing has changed other than the fact that we now are producing more of our own milk. I am guessing that even if the tariffs were lifted Wisconsin dairies would not be happy with the even lower prices they would need to take in order to get the Canadian business back.

The funny thing was listening to Trump talk to the dairy guys up there. The longer he talked the less sense he made and I think it soon became evident to the farmers there that he was way out of his league. He may know something about building hotels. I am guessing his knowledge on farming and marketing farm products is a little rusty.