US Dairy Producers to Get Some Relief With New NAFTA Accord

The US dairy industry can look for some relief to the renegotiated NAFTA treaty, which proposes to eliminate Canada’s so-called Class 7 subsidies. The effect would be to allow US producers greater access to the Canadian market for certain products, including skim milk powder. It also would restrict Canadian sales of such products on the global marketplace. The proposed new treaty, renamed the United States, Mexico, Canada Agreement (USMCA), otherwise leaves Canada’s dairy-supply management system largely intact.

Canada’s exports of skim-milk powder increased to a projected 140,000 tonnes in 2018 from 103,000 tonnes in 2016. As a result, Canadian cheese makers didn’t find as much need for high-protein unfiltered milk from the US, since they were able to replace US product with subsidized domestic supply. At the same time, Canadian exports of skim-milk powder increased by 67 percent to 72,000 tonnes in 2017 from 24,000 tonnes in 2016. Gro Intelligence provides subscribers with the data and analytics necessary to keep up with global dairy trade.