Amid word that a renegotiated trade pact between Canada, the U.S. and Mexico will undercut Canada’s dairy industry, Manitoba dairy farmers say the the deal puts a damper on plans for future growth.
Dairy Farmers of Canada say the newly minted U.S.-Mexico-Canada Trade Agreement, or USMCA, will grant greater market access to the domestic dairy market and eliminate competitive dairy classes, which the group says will shrink the Canadian industry.
Here’s what Prime Minister Justin Trudeau said of the deal:
Bothwell Cheese executive vice president Wally Smith says he is concerned about what increased market access will look like.
“We are still trying to determine exactly what the economic implications of that would be for our company,” Smith said. “This milk is locally sourced from Manitoba dairy farmers, and we are very proud of the product we provide the Canadian marketplace.”
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Details on the deal remained sparse, but U.S. administration officials say it provides increased access to Canada’s dairy market for U.S. producers and limits the American impact on Canada’s controversial supply management system for dairy and poultry products.
“It’s going to be very critical to Canadian consumers to continue to promote Canadian producers,” Smith said.
“I think farmers work hard in this country, and this is a hit to them.”
The lobby group says the measures will have “a dramatic impact not only for dairy farmers but for the whole sector,” adding that it fails “to see how this deal can be good for the 220,000 Canadian families that depend on dairy for their livelihood.”
David Wiens with Dairy Farmers of Manitoba is voicing concerns about how the entire farming process may change for him.
“On the farm we make investments to make improvements and expand our facilities in anticipation of market growth,” Wiens said. “It turns out now that may not have been necessary.”
The deal may be unpleasant for dairy producers, but it could work out to be favourable for consumers.
Bryce Matlashewski, advisor for National Bank Financial, said the USMCA could lead to better prices at the grocery store.
“Dairy farmers are not going to be too pleased with this deal. It does limit the value of their commodity that they are producing,” Matlashewski said.
“It does mean that there is going to be more supply in Canada, and in theory, that could mean better retail prices on dairy products such as cheese and milk.”
He said although the agreement “may not be the best deal,” it is better than no deal at all, and will put the Canadian economy into a growth mode.
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-With files from The Canadian Press