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Broker says markets for U.S. farmers will improve without Class 7

A commodity broker says the new U.S. Mexico Canada trade deal won’t mean significant dairy market access to Canada, but the real win for U.S. farmers will be a more level playing field on the world skim milk powder market.

Mike North of Commodity Risk Management Group tells Brownfield, “They (Canada) would price skim against the lesser of The United States, the EU, Oceania, South America, assuring that they would be the cheapest price point in the world.”

North says Canada’s Class 6 and 7 prices made it almost impossible to sell powder on the world market.  “Canadian powder was literally hopping a train, crossing both of our borders and going into Mexico cheaper than we could sell it, and that was a problem.”

North says export success for the U.S. is not a matter of having a big victory in one country, but instead, lots of victories in lots of countries.  “We’ve come to a deal with Korea, we’ve entered into one with Japan, we’ve got other things going on in Southeast Asia right now.  We’re really starting to pick up the pieces where I think the TPP (Trans-Pacific Partnership) fell apart.”  North says the U.S. still has some catching up to do on trade deals after backing out of the Trans-Pacific Partnership.

Mike North spoke with Brownfield during World Dairy Expo in Madison, Wisconsin.