ST. PAUL, Minn. – A new trade policy in Canada threatens to put dozens of Minnesota farmers out of business.
Earlier this month, the milk processing plant Grassland Dairy Products, Inc. sent out a letter to dairy farmers in Minnesota and Wisconsin informing them of changes to their account. Starting May 1, 2017, their contracts were being dropped.
This sudden change is not exclusive to farmers doing business with Grassland. Dairy farmers all over the country are losing their contracts with processing plants, and it is all due to a new trade policy in Canada.
The Canadian Government recently implemented a “New Ingredients Strategy” in order to shut out American imports. Through duty taxes, Canadians are discouraged from using certain American dairy imports, like ultra-filtered milk.
By losing the Canadian market, dairy processing plants have more product than they can sell. This leaves them with no choice but to cut the contracts with the farmers providing them millions of pounds of milk per day. Since many of the processing plants in the U.S. are in the same situation, dairy farmers are left with nobody willing to buy their milk, and they might have to shut down their operation because of it.
Not only does this new policy hurt dairy farmers across the country, some U.S. dairy groups are calling it a violation of the North American Free Trade Agreement (NAFTA).
With the May 1 deadline fast approaching, Gov. Mark Dayton wrote a letter to President Donald Trump requesting his help in mediating the trade war.
“This disruption in U.S. dairy export sales is further depressing already low milk prices and oversaturating our domestic markets,” Dayton wrote. “I respectfully urge your Administration to take every possible step to preserve fair trade among our North American trading partners.”
“Without a swift resolution, multi-generation Minnesota dairy farmers will soon be forced out of business,” Dayton added.
This week Trump acknowledged the trade issue, calling it a “disgrace.” He also questioned the future of NAFTA.
“We’re going to stand up for our dairy farmers in Wisconsin,” Trump said. “We are going to make some very big changes, or we are going to get rid of NAFTA once and for all.”
He said his administration would be “reporting back sometime over the next two weeks” in regards to trade relations with Canada.
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