New Canadian Trade Policies Put Minnesota Dairy Farmers on Edge

April 11, 2017 06:50 PM

Some Minnesota farmers now have nowhere to send their milk, as processors brace for new Canadian trade policies that kick-in next month.

Canada's pricing policy has lowered the demand from milk processors in states like New York, Wisconsin and Minnesota. The Minnesota Milk Producers Association says 15 to 20 farmers in the Southern end of the state have already been told their milk will no longer be accepted.


Dave Buck's farm in Lonsdale is fine, for now, but the president of the MMPA said he has cause for concern.

"This is the first time, to my knowledge that someone has gotten notice that they will not take their milk," Buck said. "I've been doing this for 40 years, I guess, so it's pretty eye-opening."

With that extra supply in the market, industry experts worry dairy prices could soon be lower for producers across the board. Marin Bozic is professor at the University of Minnesota's Department of Applied Economics, but he also serves as the associate director for the Midwest Dairy Foods Research Center. He calls the market loss a crisis that could have far-reaching impacts.

"In Minnesota, what we can expect if the situation is not resolved is either for some families to completely lose their farms, or for the milk prices to decline as this surplus milk is distributed around the region," Bozic said. 

RELATED: Minnesota Farm Incomes Rise Slightly in 2016 Amid Low Prices

Bozic wonders how dire the situation might become if the industry lets 20 farms fold. Unresolved, he said, the future of dairy farming could get grim and cost consumers at the store.

"As we started relying on export markets more and more, we are facing demand that's more volatile," Bozic said. "Long-term consequences of a crisis like this is that consumers need to pay more for milk, because less people want to be in a sector that's highly risky."

Dairy industry leaders said they met with Gov. Mark Dayton Monday night. Tuesday afternoon, Minnesota Department of Agriculture Commissioner Dave Frederickson released the following statement:

"Minnesota's dairy industry is critical to our agricultural economy. Our farmers and processors also rely on a strong export market. Recent changes to Canada's export pricing policy are resulting in less exports, over supply issues here in Minnesota and even lower dairy prices. This puts our farmers at an unfair disadvantage and could drive some farms out of business. Canada is an important trading partner for Minnesota and the United States. The Department of Agriculture is working hard to restore free and fair trade between our countries."

While Minnesota's milk market remains a concern, the International Dairy Foods Association said Wisconsin and New York will see the biggest blow. In fact, the president and CEO of the IDFA said the two states are estimated to lose $150 million worth of ultra-filtered milk exports.


Tyler Berg

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