Milk, in particular Canada’s supply management system, has always been a preoccupation of our southern neighbours.
If you want to make someone in the U.S. agriculture sector go apoplectic in short order, just bring up the subject.
To quote the current occupant of the White House in a tweet launched in the midst of USMCA negotiations “… they charge us up to 300 per cent on dairy — hurting our Farmers, killing our Agriculture!”
The online declarations of a noted megalomaniac who is only faintly acquainted with the concepts of truth and accuracy are just the punctuation behind views that are widely held south of the border.
Take the words of Tom Vilsack, the Obama-era agriculture secretary, and current head of the U.S. Milk Export Federation. During that same set of negotiations he chided Canada for the need for “greater transparency” and a “more consistent, transparent and stable” tariff structure.
It’s all a bit rich when one considers just how opaque the U.S. dairy sector itself is. A study conducted on behalf of the Canadian dairy sector pegged government funds as the source of 78 per cent of U.S. dairy farmer income in 2015, for example.
That’s naturally spurring production that wouldn’t otherwise make economic sense. The effects can be seen in numbers from the United States Department of Agriculture itself, which just last year noted there was a 1.4-billion-pound mountain of surplus cheese (and increasing by about six per cent a year) stashed in refrigerated warehouses throughout the U.S.
Further USDA stats show that between 2008 and 2017, U.S. milk production climbed by 13 per cent, even as U.S. per capita milk consumption tanked by 14 per cent.
Unsurprisingly, that’s led to a lot of interest in the U.S. in growing dairy exports, including dairy exports to Canada.
Vilsack was speaking recently to the World Dairy Expo in Madison, Wisconsin, where Glacier FarmMedia’s John Greig was in attendance. There, speaking to a primarily U.S. audience, he touted the importance of growing milk exports for U.S. producers. He said domestic consumption was beginning to climb again, but firmly planted the U.S. flag in global markets, saying they were the key to the future.
He said the U.S. is in the middle of a five-year plan to dramatically increase dairy exports and in 2018, the U.S. has increased exports by US$992 million over 2016.
If that’s how a nation that’s long been one of our closest allies is going to treat us in the global marketplace, it raises the question of how those not so close to us might act.
Unfortunately we’ve got a living, breathing example of this before our very eyes in the form of China’s de facto ban on shipments of Canadian canola, and its intransigence in working towards a solution to the situation.
It’s causing many to wonder exactly what Canada’s future as a food exporter might look like. One group is the Agri-Food Economic Systems think-tank, based out of Guelph, Ontario.
Economists there just released a report that delves into the unravelling global trade order and how that might affect Canadian trade prospects, as our new Ottawa correspondent D.C. Fraser reports in our Oct. 17 issue of the Co-operator.
The authors of that report, respected agricultural economists Al Mussell, Douglas Hedley and Ted Bilyea, say Canada cannot count on a return to the old orderly world of global trade that’s been in place since the 1980s — and that puts the nation wedged somewhere between the proverbial rock and a hard place.
We’re unable to count on a rules-based trading system because our major trading partners and competitors seem to be hell bent on going off-script in pursuit of their national interests. And we’re also too small, relatively speaking, to go toe to toe with larger national economies like the U.S., China and the supranational European Union. If we try to outspend them, we will simply wind up outspent, outgunned and outclassed.
For those who have been around for a few years, it looks uncomfortably like the position middle-power agricultural economies like Canada and Australia found themselves stuck in during the prolonged subsidy war between the U.S. and EU during the 1980s and 1990s.
It’s caused the report authors to propose some courses of action that, just a couple of years ago, might have sounded heretical. For example, they suggest a tax on food imports that are unsustainably produced might be in order.
Details aside, what they’ve essentially issued is a call to action and change.
As a nation we need to heed this call. After all, one definition of insanity is doing the same thing, over and over again, hoping for a different result.