Standing at Cayuga Milk Ingredients Monday, U.S. Senate Minority Leader Charles E. Schumer called on U.S. trade officials to make it a priority to secure a level playing field with Canadian dairy producers during the renegotiation of the North American Trade Agreement (NAFTA). Schumer said Canada’s dairy pricing policies and high tariffs have effectively created a “Dairy Wall” stopping certain American dairy products from accessing Canadian markets and distorting global trade.
Cayuga Milk Ingredients (CMI), have been severely hurt by Canada’s trade practices. A cooperative of 30 local dairy farmers with over 70 employees, CMI has already lost tens of millions of dollars in contracts due to Canada’s actions. Schumer said that the time to secure a level playing field with Canada – by expanding market opportunities and eliminating Canada’s unfair pricing policies – is now and the U.S. cannot let this opportunity go to waste.
“Our hardworking New York dairy farmers and producers like Cayuga Milk Ingredients are the most competitive in the world, but they depend on stable and fair rules to compete in a global economy, to sell their dairy products, expand their business and create new local jobs,” said Senator Schumer. “As trade officials near a deal to renegotiate NAFTA – an issue President Trump and I both agree on – we must make it a top priority to begin reversing restrictive dairy pricing policies in Canada that are hurting our dairy producers at their core, and now is a real opportunity to do just that.”
In addition to Canada’s 270 percent tariff on milk, a program called the “Class 7” pricing program, a market-distorting supply management system, has caused severe pain to New York dairy producers like Cayuga Milk Ingredients (CMI) since it came into force last year. In fact, Canada has used the Class 7 program to triple its milk powder exports in the past year by creating excess milk production capacity within Canada, then dumping the resulting milk powder onto world markets. To further prove this dumping exists, Schumer added that Canada’s dairy farmers are some of the highest paid in the world, yet Canadian dairy companies are still able to be among the lowest cost sellers of Class 7 products globally. Locally, CMI lost $30 million in annual sales within days of Canada’s implementation of Class 7, dealing a significant blow to the local agriculture economy.
“In the four short days following Canada’s implementation of its National Ingredients Strategy to include a Class 7 milk price, CMI lost $30 million in annual sales. It is clear that Canada’s sole intent through its Class 7 pricing was and is to manipulate the free markets by dumping their low cost skim milk products onto the World markets while simultaneously maintaining high tariffs to block imports of dairy products into Canada. If Canada wants to maintain supply management, then they must manage their milk supply and not dump their excesses on the World markets. I applaud Senator Schumer for his steadfast support of New York dairy farmers and his ongoing efforts to force Canada to dismantle its manipulated market distorting Class 7 pricing program,” said Kevin Ellis, CEO of Cayuga Milk Ingredients.
As U.S., Canadian, and Mexican trade officials are closing in on a deal to revamp North American Free Trade Agreement (NAFTA), Schumer said now represents a real opportunity to dismantle Canada’s market-distorting policies and ensure a level playing field for American dairy farmers and producers. Schumer noted that he has stressed the importance of the issue directly to past and current administration officials, including current United States Trade Representative Robert Lighthizer and President Trump, who have both expressed a desire secure meaningful changes in our dairy trade relationship with Canada.