A major Cayuga County business is already losing customers after Canada imposed new restrictions on high protein milk imports.
Cayuga Milk Ingredients CEO Kevin Ellis said Thursday that the Aurelius company is being affected by two new policies — Canada’s National Ingredients Strategy and Ontario’s Class VI pricing program. Both initiatives, according to Ellis, appear to be in place to prevent the importation of high protein milk ingredients.
“Cayuga Milk Ingredients has suffered a loss of some customers as a result of these recent changes and, without action, will most certainly lose more,” Ellis said in a statement.
In 2015, Cayuga Milk Ingredients exported more than $23.6 million worth of milk protein ingredients and ultra-filtered milk to Canadian customers. Exports were expected to climb to at least $30 million this year, but Ellis said the sales may be in jeopardy because of the new regulations.
U.S. Sen. Chuck Schumer sent a letter last week to Agriculture Secretary Tom Vilsack and Trade Representative Michael Froman requesting an investigation into Canada’s trade practices. He said Cayuga Milk Ingredients and other U.S. companies were provided duty-free access for ultra-filtered milk under the North American Free Trade Agreement.
He called the new Canadian rules “a blatant attempt to clamp down on American dairy products.”
Ellis said the restrictions appear to violate NAFTA.
“Canada now desires to participate in the (Trans-Pacific Partnership), and these recent policy changes call into question whether the Canadian government can be trusted to honor their trade commitments long term,” he said.
The loss of Canadian sales could affect more than Cayuga Milk Ingredients’ finances.
The company, which has 70 employees, may need to make “adjustments,” according to Ellis.
“We never want to lay people off, so maintaining our export markets is critical to us,” he said.
Bill Morgan, a Cayuga County farmer and chairman of Cayuga Milk Ingredients, said the impact of Canada’s actions could be felt throughout the state.
It comes at a bad time for dairy farmers. Morgan noted that farms are already dealing with a 60 percent decrease in milk prices compared to two years ago.
“The loss of this export business will impose greater strains on the New York dairy economy as more milk suppliers will compete regionally for limited milk demand,” he said. “Without the ability to export the milk proteins, more milk will be dumped in New York.”
Source: Auburnpub
