Trade is a hot topic these days, with NAFTA renegotiation about to commence and U.S. participation in TPP withdrawn. But it’s the recent dairy trade actions taken by the Canadian government that I fear may cause more lasting damage to Idaho’s dairy market.
We are the fourth-largest milk producer in the U.S., with 23,000 jobs related to the state’s dairy industry. All of Idaho’s 490 dairy farms are family-owned. In 2016, we produced 14.7 billion pounds of milk, which flowed through 22 processing plants that transformed milk into cheese, butter, dry nonfat milk, whey and other ingredients.
Darigold, a processor that exports ingredients to 20-plus countries, urges strong action on this issue. I serve on the board of Darigold and the Northwest Dairy Association, a cooperative owned by farmers.
Our industry is under severe and inappropriate pressure from the Canadian Dairy Commission’s new milk-protein class. Canada’s strategy subsidizes the price of farm-gate milk to stop the import of U.S. products that have historically entered Canada without tariff.
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Canada would like to fill this need itself so it can produce more butter, which is in demand. However, a bigger problem occurs when you make butter: Solids, like protein, are produced in excess of Canadian demand. So they dump these on the world market and undercut other countries, driving down prices to unsustainable levels.
The U.S. dairy industry urges state and federal representatives to ask for a reversal, and to take the matter to the World Trade Organization.
This change in pricing threatens the livelihoods of the U.S. dairy industry. Trade is critical to us.
We strongly urge a free, open, rules-based trading system where agricultural economies make the products for which they have the greatest relative competitive advantage. Strong global trade creates the greatest good worldwide — for both consumers and farmers.
Allan Huttema owns and operates a dairy farm in Parma. allan.huttema@ darigold.com