By Connor Lynch
It’s not quite calling to an end for supply management. But the CEO of Saputo Inc., said that Class 7 milk needs to go.
Lino Saputo Jr. told Reuters that Class 7 milk was Canadian producers’ way of trying to have it both ways. “You can’t have your cake and eat it too,” he said. The Montreal-based milk processor is one of the largest in Canada, and one of the 10 largest dairy processors in the world.
He spoke with Reuters just a day after U.S. Agriculture Secretary Sonny Perdue said in a visit to Canada that he couldn’t see NAFTA talks going forward while Class 7 milk still exists.
The new milk class hasn’t even turned two years old yet. The nascent milk class was created by the Dairy Farmers of Ontario to try and counter cheap milk ingredient imports flowing unchecked over the border. Thanks to a series of loopholes, it dodged import tariffs but was still allowed to be used in processing, such as for making cheese, making it an extremely cheap alternative to using Canadian milk. The lower-priced Class 7, which is priced at world market prices, was described by many farmers as a necessary evil. It lets producers compete and send milk, even if it is at a lower price.
The creation of Class 7 on Feb. 1, 2017, drew a sharp backlash from the northern U.S. dairy states, particularly Wisconsin. One processor directly cited Ontario’s new milk class as the reason for cancelling contracts with 75 producers with only 30 days’ notice. The issue has been blamed by some for bringing Canada’s milk system onto the American administration’s radar. Speaker of the House Paul Ryan represents Wisconsin, and the Speaker has a powerful position.
