Dairy Report: Canada's Class 7 Pricing a Focus of U.S. Policy Makers

Canada’s Class 7 dairy pricing policy is drawing the attention of U.S. politicians and dairy industry groups prior to North American Free Trade Agreement (NAFTA) renegotiations.

Senate Minority Leader Charles Schumer (D-N.Y.), Speaker of the House Paul Ryan (R-Wis.) and Sen. Tammy Baldwin (D-Wis.) are just a few of the political leaders who want the Trump Administration to act on what they call unfair trade tactics by Canada. 

“As trade officials near a deal to renegotiate NAFTA – an issue President Trump and I both agree on – we must make it a top priority to begin reversing restrictive dairy pricing policies in Canada that are hurting our dairy producers at their core, and now is a real opportunity to do just that,” Schumer says.

Three dairy industry groups released a joint statement at the end of April after 68 members of Congress sent a letter to U.S. Trade Representative Ambassador Robert Lighthizer about the trade deal.

“Canada’s Class 7 milk pricing policy, implemented 14 months ago, artificially lowers milk ingredient prices and incentivizes the substitution of domestic Canadian dairy ingredients for imported ingredients. It also promotes the dumping of Canadian proteins onto world markets at below-market prices,” says Michael Dykes, D.V.M., president and CEO of the International Dairy Foods Association. 

“It is time to for Canada to eliminate all dairy tariffs so we can have true free trade across North America for all commodities,” says Jim Mulhern, president and CEO of the National Milk Producers Federation. 

“It is critical that the U.S. pursue an aggressive strategy to stop Canada’s ongoing and intentional disregard of its trade commitments to the harm of U.S. dairy farmers and exporters. Otherwise, Canada’s new policies will chip away not only at the current trade with Canada but also at our trade surpluses to other markets that import milk powder as well,” says Tom Vilsack, president and CEO of the U.S. Dairy Export Council.

Additional comments from Michael Dykes, D.V.M., president and CEO of the International Dairy Foods Association, can be watched above in the Dairy Report video from AgDay.