Over 70 Wisconsin dairy operations are already feeling the blow from a protectionist Canadian trade policy that has slammed the door on American dairy exports, violated existing trade commitments, and left farmers across the state scrambling to find milk buyers.
Grassland Dairy Products Inc. informed over 70 operations this week that their contracts with the company will end May 1st, leaving affected farmers without buyers and at risk of losing their operations. The company cited a substantial loss of ultra-filtered milk exports following new Canadian dairy pricing regulations as the reason behind the broken contracts.
The controversial policy has re-priced Canadian milk products in ways that negatively impact demand for imported products like ultra-filtered milk. Canada is the largest export market for U.S. agriculture, and nearly one billion dollars in trading revenue comes into Wisconsin each year from products shipped to Canada.
“This is a huge deal to us,” said Wisconsin Secretary of Agriculture Ben Brancel in an interview this week. “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 market.”
The Wisconsin Department of Agriculture, Trade, and Consumer Protection (DATCP) has expressed concern over this looming policy for over a year. Secretary Brancel and Wisconsin Governor Scott Walker first began making conversation with U.S. and Canadian government officials about the policy and its potential impact on Wisconsin farmers early last year.
“I think we’re a little bit shocked that it came to this,” said Secretary Brancel. “I think our hope was that if we had to find a new home for milk we could do that, but because of spring flush and increases in production in other states, it has put pressure on the total capacity our processing industry has to handle the volumes of milk that they’re currently faced with.”
Wisconsin is currently calling on processors and marketing organizations to help find a place for the milk displaced by this policy, and Secretary Brancel plans to meet face-to-face with the processing industry to attempt to work out a solution for affected farmers.
Learn more in my full interview with Secretary Brancel here:
Interview with WI Secretary of Ag Ben Brancel
The National Milk Producers Federation (NMPF), the U.S. Dairy Export Council (USDEC) and the International Dairy Foods Association (IDFA) have also condemned the policies, calling on the federal government, and on governors in northern states, to take immediate action in response to Canada’s violation of its trade commitments to the United States.
“Canada’s protectionist dairy policies are having precisely the effect Canada intended: cutting off U.S. dairy exports of ultra-filtered milk to Canada despite long-standing contracts with American companies,” said Jim Mulhern, president and CEO of NMPF. “American companies have invested in new equipment and asked dairy farmers to supply the milk to meet demand in the Canadian dairy market. This export access has suddenly disappeared, not because the market is gone, but because the Canadian government has reneged on its commitments.”