News

AFBF: Canada is having its cake and eating it too

 

A new report by the American Farm Bureau Federation says Canadian milk production is increasing faster than any other country globally and has negatively affected dairy farmers in the U.S.

AFBF’s market intelligence director John Newton tells Brownfield Canada has increased production about 16 percent the past four years to meet increasing demand for higher fat dairy products. U.S. milk production only grew six percent during that same period.  “The problem is they’ve got a supply management system, that means their consumers have some of the highest prices for dairy products in the world.  Effectively, Canada is having their cake and eating it too.”

Newton says in the last two years, Canada has changed their milk pricing system which has created artificial domestic prices and allows them to dump surplus skim milk solids onto the global market at very low prices. He says the new class system has virtually stopped the imports of U.S. ultra-filtered milk and has hurt U.S. dairy prices.  “Producers are losing access to markets because milk supplies are backing up, there’s not enough processing capacity and one of the reasons is the drop off in demand from Canada.”

Newton says Canada’s skim milk powder exports increased 200 percent in 2017 with their new supply management system.

AUDIO: Interview with John Newton