Alberta family dairy farms are recently getting caught in the crossfire regarding the North American Free Trade Agreement (NAFTA) and tariffs. The American dairy industry wants access to Canada to try to solve their serious over production concerns.
“Trump is picking on family farms like mine because the USA just has too much milk,” says Albert Kamps, vice chairman of Alberta Milk and dairy farmer near Lacombe. “They are over producing and want to dump their oversupply in Canada but we’re full.”
The Canadian supply management system keeps the majority of your dairy (and poultry) products being supplied by Canadian farms. This is done through quota that manages the production of milk and tariffs on some foreign dairy. Tariffs are a way for our farmers to be shielded against the heavily subsidized dairy coming into Canada. For example, American dairy farmers cheques are subsided 73 per cent (or $2.2 billion) from their government (Grey, Clark, Shih and Associates, 2017).
“What the American administration also doesn’t tell you is that no tariffs are paid on the first 10 per cent of products. The USA only allows three per cent tariff free, but we’re labeled as the bad guys.” Kamps continues.
Canada has a five-to-one trade imbalance with the U.S. on dairy, meaning we import about five times more dairy than they do. The Canadian market is too small to make a dent in US overproduction where the state of Wisconsin produces more milk than all of Canada.
Canadians want Canadian milk
Two recent polls (Abacus and Ipsos) suggest that Canadians overwhelmingly suggested that they want to support Canadian dairy farms, rather than importing their milk. The dairy industry in Canada supports nearly $20 billion towards the GDP and sustains about 215,000 jobs
Comparing American and Canadian dairy
Number of cows per farm
Number of dairy farms
Use of synthetic hormones
Cost of milk*
*AC Nielson, 2017. Based on comparable products (rbST-free)
USA: 73% of their cheque or about $22 billion
Canada: supply management through quotas.
USA: Open market
Source: Alberta Milk