• If you are having problems logging in please use the Contact Us in the lower right hand corner of the forum page for assistance.

US & Canada Milk Spat Explained

Help Support Ranchers.net:

Curious how the dairy industry is in trouble all over the globe except in Canada, and the rest of the world thinks the solution is to punish Canada rather than imitating it.
 
Fact is the dairy industry is doing well - almost $20 milk and cheap corn will do that (I'm pretty sure dairymen are still crying poor). I'm pretty sure the whatever board would not pass constitutional challenges, not that we don't ignore the constitution all the time. A trade investigation isn't a punishment, sometimes honest folks disagree.
 
Retail prices for milk are 3-4 times more in Canada compared to USA averages. ($2.50/liter vs. $3.20/gallon)

I don't know how a dairy farmer could possibly make ends meet with $18.00/cwt milk today. Our base average was around $11.00 in the 1970's and we weren't exactly getting rich. (Not counting the school milk/surplus [above quota] discount deductions, plus the discounts of spoiled/outdated retail milk on the shelves we paid to the processor.)

Ugh. I wouldn't want to go back.............................

Isn't the lower prices (due to added tariffs) paid to USA dairy folks today equal to the Canadian WTO complaints of Canada beef being discounted because of the onerous handling of Canadian calves (COOL) of a few years ago?

Seems hypocritical to me and I've never had a bad word to say about Canadian trade practices..............
 
Correct me if I am wrong but there isn't two way trade in milk like beef.
We sell feeders and butcher cattle to US and US sells us beef and feeder cattle depending on the markets.

"The American agricultural industry is heavily subsidized. In WTO filings, the U.S. reported in 2012 that it had paid out $3.84 billion in direct payments to producers. Further, the U.S. has several dairy price support programs in place for its dairy industry that have paid out millions in support for the sector."
And they complain about our system.
And I am not in favor of marketing boards!
 
Canadian dairymen get paid almost double what U.S. farmers get paid for milk. Not much need for subsidies..................
 
Mike said:
Canadian dairymen get paid almost double what U.S. farmers get paid for milk. Not much need for subsidies..................
Click to expand...

Exactly. Seems like there is a learning there somewhere.
 
There is learning. Canada citizens flock across the border to buy cheaper milk. They are getting smart.
 
Mike said:
Retail prices for milk are 3-4 times more in Canada compared to USA averages. ($2.50/liter vs. $3.20/gallon)

I don't know how a dairy farmer could possibly make ends meet with $18.00/cwt milk today. Our base average was around $11.00 in the 1970's and we weren't exactly getting rich. (Not counting the school milk/surplus [above quota] discount deductions, plus the discounts of spoiled/outdated retail milk on the shelves we paid to the processor.)

Ugh. I wouldn't want to go back.............................

Isn't the lower prices (due to added tariffs) paid to USA dairy folks today equal to the Canadian WTO complaints of Canada beef being discounted because of the onerous handling of Canadian calves (COOL) of a few years ago?

Seems hypocritical to me and I've never had a bad word to say about Canadian trade practices..............
Click to expand...

Not sure where you came up with that price comparison, Mike. We pay 4.49CDN for 4L which is a little over 1 US gallon. The price range in stores is from $4.49 to $6.25 in variety stores. Single litre cartons are much more though.

I'm pretty darn sure that if supply management goes, the price to farmers will drop sharply but there will be no change in the retail end.

I'm just remembering the BSE fiasco here when live price dropped to 25 cents per pound and the retail price never budged in the meat counter.
 
I don't see where paying a fair price for a commodity is a problem. If it's a burden to pay for quality groceries quit buying the expensive highly processed instant foods. North Americans pay a far smaller portion of their income on food than practically anywhere in the world. But we happily pay a ridiculous sum for crap foods that are killing us and belly ache about the price of fresh beef and dairy.
Aside from that, as it sits the US already has a huge trade surplus with Canada in the dairy sector. The problem is American oversupply and now Donald is trying to make that a Canadian problem. If Donald gets his way both countries will be in the same boat and both countries will be subsidizing their dairy farmers :?
 
Free trade should always be fair trade, Canada made a change, the US producers reacted, now it is a trade issue. sadly those who invested will be hurt and the small producer will suffer the most.

We will never sort out our subsidies as long as food-stamps are part of the department of ag.. both sides will always compromise to benefit the other, and nothing will get done.

I doubt Trump could do much either other then ordering a review of subsidizes and halting some of the ones abused the most by non-farmers/ranchers.
 
Mike said:
It's AT LEAST double U.S. prices. The prices vary so much here.................................
Click to expand...

New math at work here Mike? :wink:

I told you what we pay for a 4L of milk - $4.49 CDN. That would be $3.29 US for 1.05 US gallon. Almost exactly the same price as you are saying.

Another local, small-town grocery store is $5.69 for 4L. That would be $4.17 US. Higher, but still not nearly double.

What am I figuring wrong, Mike?
 
I am using internet figures for Canadian prices. I can't look at the prices in the stores up there as I can here...

Here it says Canadian avg milk is $2.48 CA per liter:

http://www.statcan.gc.ca/tables-tableaux/sum-som/l01/cst01/econ155a-eng.htm


How does that compare to $3.20 per gallon US Dollars? (USDA country wide avg.)
 
ARLINGTON, VA – "It's absurd for the Canadian government to assert there is no relationship between its new Class 7 policy and the lost U.S. milk sales there. When customers in Canada, who have been purchasing milk products from American suppliers for years, suddenly decide to switch to domestic suppliers after Canada implements a major change in milk pricing, it is abundantly clear that the lost business incurred by U.S. farmers is directly tied to Canada's milk pricing system.

"The problems this pricing policy are creating for dairy farmers in Wisconsin, New York and Minnesota are real, and they have nothing to do with U.S. 'overproduction,' as alleged in a recent letter from Canada's Ambassador to the United States, David MacNaughton. U.S. companies had, until recently, supplied Canadian customers during periods of relatively tight supplies and when production increased. The only change has been Canada's deliberate pricing policy decision – starting last year in Ontario and spreading more recently to other provinces – to create a national ingredients strategy to undercut competition from the United States. Canada didn't like U.S. farmers supplying their processors' demand for milk proteins, so they changed the rules of the game. First they moved to block our exports and, even more problematic, their new pricing strategy is positioning them to further undercut global powder markets by dumping their surplus on the world market.

"This situation is not just a bilateral trade problem for the United States. Canada's policy change to manipulate internal prices to export more dairy ingredients globally is of great concern to other nations beyond just the United States. That's why countries including Australia and New Zealand have also raised objections to Canada's harmful actions.

"Canada's effort to shift the focus away from the internal problems with its milk pricing system is disingenuous at best. Canada can support its industry without intentionally using policy tools to harm U.S. dairy farmers and world dairy markets."
Click to expand...
 
I doubt the actual price of whole milk in the store is as much of an issue is as the policy on producers.

Canada didn't like U.S. farmers supplying their processors' demand for milk proteins, so they changed the rules of the game. First they moved to block our exports and, even more problematic, their new pricing strategy is positioning them to further undercut global powder markets by dumping their surplus on the world market.
Click to expand...

Trade agreements are often on existing product and often do not foresee entrepreneurship taking on or making new markets. When the goverment "later" reacts this causes the trade to become an issue.

FREE trade needs to be FAIR. Fair is often not liked by one side or the other... and OFTEN it is the government's finger on the balance scale that tips the outrage beyond just a localized issue.

The states producers invested in a market, they saw an opportunity and exploited it,.. the Canadians' could have done the same thing but until now didn't. If NAFTA was worth the paper it was written on Canada would have found a way to promote their business without regulations. Obviously they do not care about it any more then we do. US producers should not be closed out of a market by a protectionist policy if it is really free and fair trade.

I am also sure our goverment policy puts our producers at an advantage in some ways but that should have been addressed in the trade agreement.
 
Memory isn't perfect on this, but believe I have paid about $5.79 per gallon for 2% milk in western SD in the past six months. We don't use a lot of it, with just two of us in the house, so haven't really paid a lot of attention to the prices of it.

Government regulators sure do like to pick winners and losers! It would surprise me more if that were NOT involved, on both sides!

mrj
 
To answer your question, and I'm assuming you're speaking within the constraints of trade agreements: consumer decisions are all unchallengeable. Buy American/Canadian can morph into something ugly very easily, but discrimination by the consumer is different then state actions.
 
Big Muddy rancher said:
So is a Canadian decision to by Canadian any different than Americans deciding to BUY American? :???:
Click to expand...

it is different when it changes the fundamentals of an existing trade agreement.

I feel there is a significant difference between "buy" and changing price supports. I would "expect" the Canadian goverment at ALL levels to favor Canadian products even if the cost is slightly more.

If our goverment is buying powdered milk, they should buy American produced powdered milk... otherwise stay the heck out of it.
 

Latest posts

Top