Canada & Wisconsin – New Zealand & Mexico: Saving Our Political Capital

Canada & Wisconsin – New Zealand & Mexico: Saving Our Political Capital

By Geoff Vanden Heuvel

Canada & Wisconsin - New Zealand & Mexico: Saving Our Political CapitalEditor’s note: The author is a dairyman in Chino, Calif. He’s board member and consultant to the Milk Producers Council. This piece first appeared in the MPC newsletter dated May 5 and is reprinted with permission.

The good news is… it seems like the 70 or so dairy farmers who were cut off by Grassland Dairy Products in Wisconsin found a new home for their milk. That is always a relief. Finding themselves without a home for their milk is not something Wisconsin dairy farmers have had to cope with for several generations. Grasslands blamed the Canadians for making some changes to their system, which made their domestic milk products more affordable, therefore squeezing out the American imports.

But is Canada really the problem? I don’t think so. The fact is there is too much milk in the Upper Midwest and Northeast right now and that is putting pressure on the system. For several decades, California experienced too much milk and that caused dairy farmers to pay very close attention to who they ship their milk to. It is why most producers here belong to cooperatives that are obligated by membership agreements to find a home for all their members’ milk. So, while it is a new experience for Wisconsin producers to be scrambling for a home for their milk, it is not an unprecedented reality for dairy farmers located in the rest of the country.


As for what Canada did or did not do, I can remember clearly a decade ago when New Zealand created a product called milk protein concentrate – “mpc” – to get around American tariff restrictions and flooded the US with this cheaper powder substitute. We rightly protested to our government that it was unfair, but I do not believe anything was ever done about it.

We have now done the same thing to the Canadians by inventing an ultra-filtered solids product to get around Canada’s dairy trade restrictions and they decided to do something about it. Good for them.

The Upper Midwest and Northeast have greatly expanded production in the past few years and without any discernable supply management in place, farmers here in the U.S., as well as in Europe where supply controls were lifted in 2015, produce more milk than the market can absorb. This is a chronic problem that calls out for a solution, but so far there is no consensus behind a remedy.

In the meantime, the real threat to the U.S. dairy industry comes from any action by our government that hurts our ability to export dairy products to Mexico and China. This is where we should focus our political attention. Both markets have generated strong demand for American dairy products. I am concerned about the rhetoric coming from some quarters in Washington, D.C. that might put those markets in jeopardy. We, American dairy farmers, and particularly California dairy farmers, have a lot riding on maintaining a good trading relationship with these customers. That should be our message to Washington, D.C.

 

Canada & Wisconsin – New Zealand & Mexico: Saving Our Political Capital

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