Canada Trade Dispute Threatens Wisconsin Dairy Farms

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"The (trade) rules that are in place are not being enforced, and this is causing revenue losses estimated at $231 million per year for Canadian dairy farmers", the trade group Dairy Farmers of Canada said last year.

In the wake of recent news that several Wisconsin dairy processors, including Grassland Dairy Products and Nasonville Dairy, have abruptly terminated milk contracts with farmers, Wisconsin Farmers Union wishes to express sympathy for affected farmers.

Until recently, ultrafiltered milk - a high-protein concentrated product typically used in cheese production - was exported tariff-free to Canada, unlike USA -produced whole milk. "For every seven days that we're producing dairy products, one of those days is used in the export market, and this shows what happens when you lose part of that export market". The policy change, lobbied for by the trade group Dairy Farmers of Canada, was extended nationwide in March. Behling, who has been in the dairy business for about four years as Wildweed Holsteins & Jerseys, shipped roughly 4,000 pounds of milk daily to Grassland for almost 18 months.

Rather than crying over spilled milk, state legislators made a decision to take action to address the steady price decline of Wisconsin's dairy industry by writing UW System President Ray Cross urging university researchers to find alternative uses for the dairy product.

Some Wisconsin dairy farmers say they could be forced out of business. Milk isn't subsidized like some other agricultural commodities.

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Some Wisconsin dairy farmers have been notified that their contracts with Grassland Dairy Products are being canceled. "And the next day it's all taken away from you, in a matter of minutes, when you open an envelope". Wisconsin Farm Bureau President Jim Holte said Wednesday that the entire situation is "concerning" and can not be taken lightly.

"I think the bottom line is that we as a government recognize how important dairy is to our state and what a driving force it is for economy as a whole and that we need to do something about it", Tranel tells our Madison affiliate WKOW-TV. "Finding a new processor fast is my priority".

With so much milk on the market, that will be an arduous task. "We encourage other dairy processors to be more forward-thinking in their communications with their farmers".

"The problem right now is that we've seen milk production go up in other states, including South Dakota and MI, and (Wisconsin processors have) bought up some of that milk, so the system is full right now and has left us less flexibility than we had hoped for", Wisconsin Secretary of Agriculture Ben Brancel told the Wisconsin State Journal.

Behind this action is a new pricing structure implemented by Canada, which dramatically increased the cost of USA dairy imports and encouraged dairy companies there to purchase similar items from Canadian dairy producers.

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National Milk Producers Federation President and CEO Jim Mulhern said the new Canada policy is protectionist and possibly a violation of trade agreements. He said ultimately, these actions are aimed at removing competition for Canada's dairy industry.

"When we allow Canadian products in duty free but, they find a loophole for American milk, that's not fair". "Any disruption in exports of dairy would have a devastating ripple effect on our farms and beyond, to workers in processing, transportation, and countless other sectors whose jobs are supported by these exports". Senators Tammy Baldwin and Ron Johnson also issued statements, saying they would like to see if the situation can be investigated to determine if US dairy exports were being unfairly blocked.

Mike North, president of Commodity Risk Management Group in Platteville, said the impact of too much milk on the market won't translate to lower prices for consumers.

The Canadian tariff was being applied to US milk being imported into Ontario since April 2016. They also say the closing of the Canadian markets will lead to an oversupply of milk that would further depress prices.

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