03.25.16

SCHUMER: NEW RESTRICTIVE CANADIAN TRADE RULES COULD THREATEN O-AT-KA MILK AND MANY WESTERN NY DAIRY PRODUCERS; SENATOR DEMANDS FEDS ENSURE CANANDA KEEPS A LEVEL PLAYING FIELD & PROTECT WNY DAIRY

Schumer Pushes USTR & USDA To Ensure Canada Keeps its Dairy Trade Open & Accessible For US Dairy Processors Like O-AT-KA  – Warned That Onerous Trade Restrictions Hinder Competition 

O-AT-KA, With Customers Like Perry’s Ice Cream and Great Lakes Cheese, Has Plans for Growth Based on Domestic & Foreign Demand for Milk Products; And Many Dairy Farmers Throughout The Region Depend On Dairy Exports – But New Plan For Canadian Limitations on Milk Imports Puts Company at Risk 

Schumer to Feds: Protect Upstate WNY Dairy From Unfair Trade Barriers  

Standing at O-AT-KA Milk Products Cooperative, Inc., U.S. Senator Charles E. Schumer today demanded that the U.S. Trade Representative (USTR) and the U.S. Department of Agriculture (USDA) protect O-AT-KA Milk and Western New York’s dairy sector from newly proposed barriers to trade with Canada. Specifically, Canada has threatened to slow the progress of the booming Western New York dairy industry by imposing limitations on the import of milk products that can be sent to Canada from producers like O-AT-KA Milk. Schumer highlighted that dairy farmers in Western New York and throughout Upstate New York are becoming more and more reliant on the growing global market for the goods they produce. Therefore, Schumer is calling on the USTR and the USDA to work to protect U.S. dairy exports by ensuring that Canada doesn’t impose restrictive trade rules but rather honor its commitment to open borders to Upstate New York farmers.

“Western New York dairy producers could be put in grave jeopardy if these restrictive, Canadian trade barriers are allowed to go into effect. That’s why I am urging the USTR and USDA to work to ensure‎ that Canada is honoring its commitments to the U.S. and not moving forward with restrictive barriers that would threaten the ability of companies like O-AT-KA Milk to continue exporting dairy products,” said Schumer.

O-AT-KA’s majority owner is Upstate Niagara Cooperative, a dairy conglomerate comprised of more than 390 local dairy farms, several of which are located in Western NY. In 2012, O-AT-KA invested $16 million to build a new two-story addition at its Batavia plant. This allowed the facility to add new “ultra-filtration” capabilities so that O-AT-KA could expand its product offerings and increase its ability to sell to other producers in the U.S. and abroad, particularly in Canada. Right now, its products manufactured include non-fat dry milk powder, buttermilk powder, whey powder, canned evaporated milk, butter, fluid condensed milk, iced coffee, nutritional beverages and other various drinks. Schumer said it is clear that the company is working hard to invest in its facilities, products and the regional economy, as it employs 300 local residents. However, Schumer said recently proposed Canadian trade barriers could hinder all of this development and growth.

Schumer explained that, right now, the Canadian government is considering taking administrative actions that would limit the ability of domestic Canadian companies to use ultra-filtered milk – produced by companies like O-AT-KA – for cheese making. In addition, Schumer said Ontario is advancing a new, targeted pricing policy that is designed to crowd out New York’s dairy sales. To date, companies like O-AT-KA in the U.S. have enjoyed duty-free access for this specific product, an agreement Canada complied with under the North American Free Trade Agreement. As a result, Schumer said the federal government must prioritize protecting the existing U.S. dairy trade with Canada and companies like O-AT-KA Milk.

Schumer said O-AT-KA relies on trade with Canada for a significant percentage of its revenue. In fact, this company exported more than $19 million worth in Milk Protein Isolate (MPU), ultra-filtered milk and other various dairy products to Canada alone in 2015. With its gross sales for 2016 expected to be similarly high, the company said sales with Canada are critical to its ability to support its workforce and products. As a result, any serious trade barrier could cost O-AT-KA millions of dollars in sales and stifle potential growth. Schumer said the success of this Genesee County company’s substantial investments as well as its products hinge significantly on the ability of O-AT-KA to market their products in the global market, like Canada.‎

For this reason, Schumer said it is unacceptable that Canada would seek to change rules in order to purposefully harm the U.S. and Upstate NY dairy industries. To add insult to injury, Schumer said, New York has made sizable investments in exporting to Canada under specific rules laid out by the Canadian government. Those sales now help support dairy farmers and rural communities across the state. Therefore, Canadian market access barriers would have a large impact on New York’s dairy sector. As the country’s third largest milk producing state, a significant impact on New York’s ability to tap into key foreign markets could also impact farmers in surrounding states in the northeast and the entire Mid-Atlantic region. Moreover, Schumer said this latest example of dairy market-access restriction appears to represent a Canadian policy shift aimed directly at impeding dairy trade.

That is why Schumer said it is concerning that Canada is weighing a regulatory change that would undermine one of New York’s most important export markets and hurt companies like O-AT-KA and even Canadian cheese makers. Therefore, during his visit to O-AT-KA today, Schumer urged both the USDA and USTR to hold Canada to previous dairy trade commitments and to preserve an important export market for Central New York Farmers. Schumer last visited O-AT-KA in 2013 to push for fair dairy trade rules with New Zealand and Canada, and specifically pushed back against attempts by New Zealand in the TPP negotiations to restrict U.S. dairy imports.

Schumer was joined by John Gould, Chairmen of the O-AT-KA Milk Products Board and local dairy farmer; Bill Schreiber, CEO of O-AT-KA; as well as many local officials and O-AT-KA workers.

John Gould, Chairman of the Board of Directors of O-AT-KA and local dairy farmer said, “Senator Schumer continues to be a strong supporter of OATKA Milk Products, a business that represents the investment and hope of hundreds of dairy farmers in Western New York and the hundreds of people we employ in Batavia New York. Canadian ultafiltered milk sales are an example of our ability to successfully compete in fair and free trade and represents 20% of our sales or about 180 million pounds of annual milk production. We continue to depend on Senator Schumer to work to defend our rights to fair and free global trade.”

A copy of Schumer’s letter to both the USTR and USDA appears below:

Dear Ambassador Froman and Secretary Vilsack:

I write to you with strong concerns about reports that Canada is weighing policy and regulatory shifts that would undermine one of New York’s most important export markets. Just a few years ago, two dairy companies made investments worth tens of millions of dollars in Upstate New York to produce ultra-filtered milk specifically for export to the Canadian cheese market. These sales are possible as a result of the duty-free access for this specific product that Canada agreed to under the North American Free Trade Agreement.

Recent reports indicate that Canada is considering administrative actions to limit Canadian companies’ capacity to use this product in further processing and that Ontario is advancing a new, targeted pricing policy designed to crowd out New York’s dairy sales. Further restraints on dairy trade are unacceptable, particularly coming on the heels of Canada’s recent pledge to expand access to its tightly restricted dairy market under TPP.

New York has made sizable investments in exporting into Canada under specific rules laid out by the Canadian government. Those sales now help support dairy farmers and rural communities across the state. New Canadian barriers to market access would have an outsized impact on New York’s dairy sector.  As the country’s third largest milk producing state, a significant impact on New York’s ability to tap into key foreign markets also will impact farmers in surrounding states in the northeast and Mid-Atlantic region. Moreover, this latest example of dairy market-access restrictions appears to represent a continuation of persistent Canadian regulatory and policy shifts aimed directly at impeding dairy trade.

We must hold Canada to its commitments and ensure that our exporters do not encounter barriers to the products they are already shipping to Canada. I urge you to strongly reject this and similar efforts to impair the value of concessions the U.S. previously secured under NAFTA. Thank you for your attention to this important priority with one of this country’s largest trading partners.

Sincerely,

Charles E. Schumer

United States Senator



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