Canada is not to blame for Wisconsin farmers’ loss of business
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April 26, 2017
In an effort to improve its own dairy industry, Canada has put in place regulations that make it harder for U.S. dairy processors to sell products in its provinces
Grassland Dairy Products in Greenwood, Wisconsin notified about 75 farms they will have their contracts cancelled as of May 1 due to losing Canadian business.
A new Canadian pricing scheme called a “national ingredients strategy” is preventing Grassland from selling ultra-filtered milk to Canada at a competitive price. In a letter to the farmers, the company said, “The Canadian government has put in place several regulations to prevent this trade from continuing.”
The strategy lowers the cost for processors to buy Canadian-made milk ingredients and consequently slashes the earnings of U.S. and Wisconsin farmers; Canada is essentially becoming independent from U.S. dairy by adjusting the prices of its milk ingredients to improve its own dairy industry.
As a result of the policy changes, close to 80 farms in Wisconsin have until May 1 to find new buyers for their milk products. If they are unable to find new consumers, the farms will likely be subject to a huge loss of income or, in extreme cases, have to sell their cows and shut down altogether.
Federal legislators from Wisconsin and New York, the affected states, are now looking to President Donald Trump for aid in the dispute. Senators Charles Schumer and Kirsten Gillibrand of New York, along with Tammy Baldwin of Wisconsin sent a letter to President Trump’s administration to act on these new barriers that are hurting American farmers.
“Dairy farmers should not have their businesses ruined and lives upended as a result of this unfair trade practice,” the senators stated.
Not so fast, senators.
What’s happening here is that Canada is implementing legislation with the best interest of its economy in mind. In response to an ever-changing market, it is lowering the prices of its milk supply to offer a more competitive cost to processors.
They are able to lower prices because there is a global oversaturation of milk: too much milk and not enough people, or processors, buying.
Canada is a nation of about 36 million people — that’s less than the population of California. If this nation can already produce enough milk for its market, there is no need to consume dairy from the U.S.
Isabelle Bouchard, director of government relations for the trade group Dairy Farmers of Canada said, “We don’t feel good about U.S. farms going out of business. But you know what? It’s not our responsibility. It’s your own responsibility, as a country, to manage your production.”
This is simply an economic and business decision. Canada isn’t taxing or blocking U.S. exports; rather, they are putting in place measures to make their farmers more competitive. What is happening to farmers across Wisconsin is very unfortunate, but Canada cannot be to blame for making a decision to improve its economic landscape.
People, policies and legislation change, it’s the natural way of business. Maybe it’s time for Wisconsin’s reliance on dairy to be a thing of the past.