Under the newly-negotiated U.S.-Mexico-Canada Agreement (USMCA), American dairy producers will get expanded access into the Canadian market.
Alberta Milk said the province’s 516 dairy farms will now be told to produce less milk, resulting in a smaller paycheque.
Mike Southwood, general manager of Alberta Milk, is disappointed with the new trade agreement.
He said dairy producers have already given up access under Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTTP) and Comprehensive Economic and Trade Agreement (CETA).
“That statement, ‘A death by a thousand cuts’ — that’s what it feels like,” he said. “We’ve got support for supply management but at the same time, it’s slowly eroding around the edges.”
Supply management means farmers meet Canadian requirements for dairy production. With more access being granted to Canadian dairy markets under the deal, processing jobs will be lost and quotas on farms across the country will be reduced, Southwood said.
“Dairy is a very perishable product, so it needs to come off the farm every two days,” he explained.
WATCH: What’s happening with dairy in the new USMCA trade agreement?
Specialty products could easily come from outside of Canada now, Southwood added.
“We need border protection, otherwise, surplus product that happens in the U.S. today comes flooding in,” he explained. “It doesn’t benefit the consumer because the retailer sets the price, not the producer.”
Milk producers are hoping for stability but the new trade agreement will affect how small family farms operate, Southwood said.
“Those impact directly at home when you start taking three, four or five per cent out of their income, potential income long term,” he said. “Not only a one-shot deal, this erosion is long term. This access is as long as that agreement’s in place.”
Over the past five years, the Alberta milk industry has experienced 20 per cent growth, Southwood said.
“That now erodes that growth, and as farmers try to adapt to increasing costs and changes on their farms, that growth is what keeps them motivated and going,” he said.
“We’ve got a lot of farmers saying, ‘What do I do now?'”
“We hope Canadians will look closely to see where it’s processed and buy the Canadian product… Our understanding is fluid milk right through to cheese is acceptable under the new agreement.”
Deron Bilous, Alberta’s Minister of Economic Development and Trade, has heard concerns from dairy producers but is satisfied with the new trade deal.
“What we are pleased to hear from the federal government is that there will be compensation to dairy and poultry farmers… We wanted to ensure that our supply-managed producers are going to be compensated and so we’ll be working with the federal government to ensure that moves as speedily as possible.”
“We’re glad to see that, at least, the federal government has acknowledged [dairy producers’] significance and importance and are putting forward a compensation package,” Bilous added.
In the energy sector, positive changes are afoot, Bilous said. Under NAFTA, Canada had to set aside a certain amount of oil production to be sold into the U.S. That quota has been lifted, which Bilous said will give companies here greater control over where to sell.
“Our products will find the best markets and the best dollars,” he said.
WATCH: Global National’s Robin Gill speaks with Foreign Affairs Minister Chrystia Freeland, Canada’s chief trade negotiator, on reaching USMCA, and about the biggest roadblock in the negotiations.