Dairy Report: Canada’s Reaction to USMCA and a Look at Higher Prices

December 6, 2018 07:00 AM
 
 

Canadian dairy producers were not pleased after the signing of the U.S. Mexico Canada Agreement (USMCA) last Friday.

The USMCA has reforms that remove the controversial Class 7 dairy policy and allows for greater access for U.S. products in Canada. Canadian dairy farmers say that Prime Minister Trudeau has broken promises to producers while giving up the country’s sovereignty by not keeping Class 7 pricing.

However, members of the U.S. dairy industry have applauded the deal. In a joint press release the National Milk Producers Federation (NMPF) and the U.S. Dairy Export Council (USDEC) praised the leadership of the Trump Administration to move the trade deal forward.

“The signing of the USMCA gives America’s dairy industry greater confidence as we head into 2019,” says Tom Vilsack, president and CEO of USDEC.

While it may take months before the effects of the deal can be seen in U.S. producers’ wallets, the October dairy margin did provide some relief as it nearly broke $9.

Driving the increase was the October all-milk price of $17.40, which is at its highest level since November of last year when it reached $18.10. Feed prices remained pretty much unchanged in October, so the 70¢/cwt increase in the all-milk price was wholly responsible for the 70¢ jump in margin.

For more on this topic, read:

From Dairy Herd Management

From Farm Journal’s Milk

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