By Tom Collins
TROY — Dairy farmers shouldn’t be thinking that the end is near for supply management, says a Dairy Farmers of Ontario board member.
Some dairy farmers are worried about the future of the industry as NAFTA talks heated up regarding supply management following U.S. president Donald Trump’s repeated remarks that Canada’s supply management system is unfair to American farmers because of Canada’s 270 per cent tariff on imports.
Worry was compounded when Prime Minister Justin Trudeau told NBC’s talk show Meet the Press in early June that Canada is moving toward more “flexibility” in supply management.
Region 8 (Oxford and Waterloo) board member Murray Sherk said while some farmers have been expressing concern, they are not panicking.
“Farmers are certainly concerned because there’s a lot of rhetoric in the news,” he said, adding that farmers are more anxious now than during other trade talks because the U.S. is keen on more access to Canadian markets. “The concern would be greater simply because Trump is essentially in his tweets, he’s wanting to scrap our system and have full access.”
The CETA (Comprehensive Economic and Trade Agreement) deal gave up four per cent of Canada’s cheese market, while the CPTPP (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) gave up 3.25 per cent of all dairy markets.
As far back as trade deals go, you could always find farmers observing that “supply management is always on the table.”
Eastern Ontario board member Nick Thurler said just three of 50 states — New York, Wisconsin and Michigan combined — over-produce by six million litres of milk a day. By comparison, Ontario produces a total of 8.5 million litres per day.
While Canadian Prime Minister Justin Trudeau has stated on multiple occasions that he will support supply management, he stops short of confirming Canada won’t give any dairy concessions in trade talks.
“I hear you, I understand your concerns — but I don’t want to start detailing all that we are trying to do in terms of talking to the Americans,” the National Post quoted Trudeau as telling a group of Quebec protestors in early June after jumping on the back of a pickup truck. “There are many issues that we will discuss.” Farmers groaned.
U.S. Agriculture Secretary Sonny Perdue said on June 14 at a press conference in P.E.I that “it’s not our desire to do away with (supply management), just to regulate it in a way that does not depress world prices.”
On June 15, Perdue said he did not see how the countries could go forward in trade talks without an end to the new Class 7 milk, the National Post reported. Class 7 was created to supply Canadian processors with a cheaper milk ingredient that U.S. producers were exporting to Canada while sidestepping a tariff.
One of Canada’s largest milk processors, Saputo, came out in favour of scrapping the Class 7.
Canadian dairy farmers are quick to point out that the United States exports more dairy products to Canada than Canada exports to the United States. U.S. dairy exports to Canada in 2016 were valued at US $631.6 million and Canadian dairy exports to the U.S. were US $85.6 million.
Despite all of the blustering by both the U.S. and Canadian governments, NAFTA negotiations are now at a standstill. Mexico is holding its presidential election on July 1, and negotiations cannot continue until Dec. 1 when the new president is inaugurated. The U.S. is holding its mid-term elections in November, and Canada will be holding its federal election on Oct. 21, 2019 at the latest.
Brant County dairy farmer Jeff Stephens said dairy farmers have spent a lot of money in the last 10 years putting up new barns and buying state-of-the-art equipment due to the robust supply management system.
“Their future for the next 25 years depends on what the trade talks are like,” he said. “I think every farmer is probably a little concerned where supply management is going.”
Concern has heightened in an instantaneous and 24-hour news cycle. “Everybody is reading it on their phones or their iPads. Now it’s more right in front of your face.”
Jacob Beehler plans to take over the family farm in Eastern Ontario within the next five years. Beehler, who just graduated from Ridgetown College, figures they will build a new barn within seven years to milk 300 cows.
With the trade talks in mind, Jacob said the future of supply management is a concern and a new, bigger building would help alleviate some of the pressure and allow farmers to expand rapidly if supply management was lost.
“If quota does go, you can just keep pushing more cows through it,” he said. “It just takes a longer time to milk.”
