Dairy Could Lose Big in COOL Fight

 
Canada

By Fran Howard

The U.S. dairy industry is increasing its effort to ensure that the U.S. Senate takes action so that the United States comes into complaiance with World Trade Organization (WTO) rules regarding country-of-orgin labeling  (COOL) laws.

“If the United States fails to repeal an aspect of its country-of-origin labeling law, U.S. dairy products could recive an icy reception in Canada and Mexico starting next year even though the issue isn’t directly related to dairy,” says Sara Dorland, analyst with the Daily Dairy Report and managing partner at Ceres Dairy Risk Management, Seattle.

The dairy industry stands to lose a lot if it becomes embroiled in the controversy that revolves around meat. Looking at Mexico alone, U.S. dairy processors exported 204,031 metric tons (MT), or 449 million pounds, of nonfat dry milk (NDM) and skim milk powder (SMP) last year.

“Mexico last year acccounted for 37% of total U.S. milk powder exports,” says Dorland. Mexico was also the largest destination for U.S. cheese exports as well, with 82,656 metric tons, or 182 million pounds, in purchases last year.

“Likely these are statistics that Mexico and Canada fully understand,” Dorland says. “Including dairy exports in retalitory measures could provide the leverage that both Mexico and Canada need to bring a swift end to COOL.”

In June of this year, the United States lost its fourth appeal to a WTO panel, which declared an aspect of COOL in violation of global trade rules because it discriminates against meat imports while giving an advantage to domestic meat products. Shortly thereafter, the U.S. House of Representatives repealed COOL for beef, pork, and chicken, but the U.S. Senate has not yet followed suit.

Prior to the vote in the House of Representatives, a survey by the Consumer Federation of America stated that 90 percent of Americans are in favor of requiring country-of-origin labels on meat. Others, however, argued that the current regulatory structure in the United States provides a safe food supply, regardless of origin, making labels unnecessary.

“At this point in the process, the stakes are high, and dairy, while not at the center of the argument, could be pulled into the fight,” says Dorland. “The WTO could grant Canada and Mexico authority to institute retaliatory tariffs exceeding $3 billion against U.S. exports.”

While neither Canada nor Mexico has indicated what products would be subject to retaliatory tariffs, a joint letter sent to the U.S. Senate from the National Milk Producers Federation, U.S. Dairy Export Council, and International Dairy Foods Association expressed concerns that dairy might get pulled into the battle.

“Retaliation against dairy products would come at a particularly challenging time for our industry, given the currently depressed global dairy market which makes sustaining exports in reliable markets all the more critical,” the letter states. The organizations then urged the U.S. Senate to pass legislation bringing the United States into compliance with the latest WTO ruling.

“While U.S. dairy has been well insulated from far lower world prices, loss of the significant Canadian and Mexican export markets due to excessive tariffs could be the tipping point,” notes Dorland.

—#—

To subscribe to the Daily Dairy Report, go to www.dailydairyreport.com and click on Register.

 

Back to news


 

Comments

 
Spell Check

Ken
Batavia, NY
10/30/2015 09:45 AM
 

  What right does anyone have to tell America that we can not label where an item was produced. Everything that is manufactured is labeled. Why should food be any different. If Canada wants to stop our milk products from going to their countries over this then shut off the import of some of their products. Why do the American people have to be eating this garbage beef that is imported from places like Brazil? The consumer should at least know where their food comes from. Where is the leadership in this country? Certainly not at NMPF.

 
 
clyde james
South Bend, IN
10/29/2015 08:37 PM
 

  Our forefathers sure crap to see how we bow to down to two country's who's whole survival depends on them dumping their goods and the rest of the worlds through their ports into our country just relabeled to get around the trade laws. Everybody knowns they do it but nothing ever done about it. Its about time to tell them to shove it. Bitch-en babys.

 
 
Craig
Kearney, NE
10/29/2015 09:17 PM
 

  Mexico and Canada must PROVE harm. They can't simply allege it. If they can't prove anything, there are no tariffs. Too bad those who pretend to speak for farmers and ranchers don't allow this to play out before they pee their pants trying to please these 2 countries. Currently, our imports from these two parasites are way up, and our exports to them are way down. Have we filed our claim with The WTO about this obvious unfair trade practice? This woman is an idiot.

 
 

Corn College TV Education Series

2014_Team_Shot_with_Logo

Get nearly 8 hours of educational video with Farm Journal's top agronomists. Produced in the field and neatly organized by topic, from spring prep to post-harvest. Order now!

Markets

Market Data provided by QTInfo.com
Brought to you by Beyer
Close