U.S. Dairy Calls Foul On USMCA Dispute Settlement

Dairy processors and cooperatives across the U.S. are calling foul after a USMCA dispute settlement. The industry argues the dispute settlement panel ruling allows Canada to limit export opportunities for American dairy producers.

The panel found that Canada’s dairy tariff-rate quota allocation measures do not breach any of the USMCA commitments cited by U.S. trade officials.

In 2022, a USMCA panel agreed with the U.S. that Canada was breaching its USMCA commitments. Canada was reserving most of the in-quota quantity in its dairy TRQs for the exclusive use of Canadian processors. Canada updated its TRQ measures, but the U.S. challenged that Canada’s dairy TRQ allocation measures still restrained U.S. dairy exporters. But, two of three panelists determined that the updated TRQ measures satisfied Canada’s USMCA obligations.

At the Professional Dairy Producers Business Conference in the Wisconsin Dells, Farm Director Pam Jahnke addressed the issue with Martin Bates. Bates is the president of global relations and marketing for Dairy Farmers of America.

Bates says disruptions like this are not something that most businesses plan for. He says unfortunately, investments in growing relationships, developing products and commercializing them in Canada is valueless when court cases like this come into play.

Here in Wisconsin, Edge Dairy Farmer Cooperative also expressed disappointment with the ruling. President Brody Stapel says the cooperative does not find the issue unsettled.

“U.S. trade officials must continue finding ways to uphold the commitments Canada — and all U.S. trade partners — make under trade agreements,” he said in a statement. “USMCA promised opportunity for American dairy farmers — an estimated 50% annual increase in export value. Unfortunately, processors of high-quality dairy products still cannot find ways to get their product onto Canadian grocery store shelves.”

According to USDA, Canada is the United States’ second largest export market for dairy products. The market was worth about $1.03 billion in 2022.