Trump’s Commerce pick aims to shake up the U.S.-Canada dairy trade. Will this increase profits for American farmers or sour relations with our northern neighbors?
Summary:
Howard Lutnick, President Trump’s nominee for Commerce Secretary, has stirred up the dairy industry with his recent comments on U.S.-Canada trade. During a Senate hearing, Lutnick vowed to fight for better access to Canada’s dairy market for American farmers, claiming that Canada has treated U.S. farmers “horribly.” This stance could shake up Canada’s long-standing supply management system and open new opportunities for U.S. dairy exports. Lutnick also argued that tariffs don’t cause inflation, citing low inflation rates in high-tariff countries like China and India. These statements have sparked debate and concern among dairy farmers on both sides of the border, with potential ripple effects for the global dairy market. As the confirmation process continues, farmers worldwide keep a close eye on developments, recognizing that any shifts in the U.S.-Canada dairy trade could have far-reaching implications for the industry.
Key Takeaways:
- U.S. Commerce Secretary nominee targets Canada’s dairy market, stirring concerns on both sides of the border.
- Increased competition could affect the profitability of Canadian dairy farms and significantly smaller operations.
- The U.S. pushes for broader access, potentially impacting North America’s trade balance and farm economics.
- Upcoming tariff decisions and trade agreement reviews could reshape dairy market dynamics by 2026.
- Farmers should monitor policy changes closely to adapt and seize potential new market opportunities.
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Howard Lutnick, Trump’s nominee for U.S. Commerce Secretary, is making strong efforts to gain access to Canada’s dairy market. During his Senate hearing, Lutnick directly criticized Canada’s treatment of U.S. dairy farmers as “horrible,” pledging to change it.
Stirring the Milk Pot
Lutnick’s tough talk has Canadian dairy farmers on edge, while their American counterparts are cautiously optimistic. “Canada treats our dairy farmers horribly. That’s got to end,” Lutnick told Wisconsin Senator Tammy Baldwin, echoing a long-standing beef with Canada’s supply management system.
The U.S. has been seeking a larger share of the Canadian dairy market due to trade objectives and economic opportunities. Despite the new CUSMA trade deal, American producers seek increased access to Canadian markets to expand their reach in the dairy industry.
Tom Vilsack from the U.S. Dairy Export Council emphasized, “We must give our dairy farmers and processors a fair shake to compete up north.”
Crunching the Numbers
The dairy trade between the U.S. and Canada is significant and impactful. U.S. dairy exports to Canada have shot up 63% in the last decade, hitting $1.09 billion. Last year, Canada shipped about 83,800 tonnes of dairy south, worth CA$293 million. The cheese was the big cheese, bringing in nearly CA$99 million.
Here’s a breakdown of Canada’s dairy trade with the U.S. in 2023:
Product Category | Export Value (CAD) | Import Value (CAD) |
---|---|---|
Cheese | $98,754,635 | – |
Fluid Milk and Cream | – | $128,500,000 |
Infant Formula | – | $151,300,000 |
Total Dairy Trade | $293,250,317 | $756,195,961 |
What It Means for the Barn
More access to Canada could lead to new international markets and increased profits through higher payments to U.S. dairy farmers. However, Canadian farmers are worried about their bottom line.
- Small family farms could face pressure from lower-priced imports.
- Mid-size operations might need to diversify their products and marketing strategies to stay competitive.
- Big dairy outfits could cash in on exports but face stiffer domestic competition.
Tariff Talk and Price Tags
Lutnick also backed tariffs, claiming they don’t drive up prices. This raised some eyebrows among the number crunchers. If they don’t tighten their borders, Trump threatens to slap 25% tariffs on Canadian and Mexican goods in February 2025.
What’s Next in the Milk House
Keep an eye on these developments:
- Will Lutnick get the nod, and how will that shake up trade talks?
- How will Canada react to the pressure on its dairy industry?
- The review of the CUSMA dairy rules in 2026 could have a significant impact.
The dairy sectors in the U.S. and Canada are facing tough times. Farmers on both sides of the border must stay vigilant as the trade winds shift.
If implemented, would these policy changes lead to a significant influx of new U.S. dairy products in Canadian stores? How could Canadian dairy farmers adjust their operations to remain competitive in a potentially more open market?
Learn more:
- Canada’s Ongoing Dairy Trade Dispute: Non-Compliance with Rules Continues, Says Trade Minister
- North American Dairy Trade: US-Mexico Relations Strengthen Amid Canada’s Growing Trade Tensions
- American Dairy Farmers Grapple with Trade War and Immigration Policies: The Fight to Stay Afloat
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