03.04.16

SCHUMER: RESTRICTIVE CANADIAN TRADE RULES COULD THREATEN CAYUGA MILK INGREDIENTS AND MANY CENTRAL NY DAIRY FARMERS; SENATOR DEMANDS FEDS ENSURE CANADA PLAYS BY THE RULES

Schumer Pushes USTR & USDA To Ensure Canada Keeps its Dairy Trade Open & Accessible For US Dairy Processors, Like Cayuga Milk Ingredients

Cayuga Milk Ingredients, With Customers Like Kraft-Heinz in Lowville, Has Plans for Growth Based on Domestic & Foreign Demand for Milk Products; And Many Dairy Farmers Throughout The Region Depend On Dairy Exports – But Newly Proposed Canadian Limitations on Milk Imports Puts Company at Risk

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

Standing at Cayuga Milk Ingredients in Auburn, NY, U.S. Senator Charles E. Schumer today demanded that the U.S. Trade Representative (USTR) and the U.S. Department of Agriculture (USDA) protect Cayuga County and Central New York’s dairy sector from newly proposed barriers to trade with foreign countries. Specifically, Canada has threatened to inflict damage to Central New York’s dairy industry by imposing limitations on the import of milk products that can be sent to Canada from producers like Cayuga Milk Ingredients. Schumer highlighted that dairy farmers in Central 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 stop Canada from walking back on previous commitments and imposing market-access restrictions on dairy products that the U.S. is already exporting to Canada.

“Central 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 Cayuga Milk Ingredients to continue exporting dairy products,” said Schumer

Cayuga Milk Ingredients represents a conglomerate of 25 dairy farms in Central New York and, in 2014, completed the process of building its new, $100 million milk processing plant in Auburn. According to the company, farmers in this conglomerate invested the funding needed to make this possible. Cayuga Milk Ingredients is also wrapping up a roughly $4 million expansion to increase its production capacity. Schumer said it is clear that the company is working hard to invest in its facilities, products and the regional economy, as it employs 68 local residents. However, Schumer said recently proposed 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 Cayuga Milk Ingredients – 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 Cayuga Milk Ingredients 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 Cayuga Milk Ingredients. 

Schumer said Cayuga Milk Ingredients relies on trade with Canada for a significant percentage of its revenue. In fact, this company exported more than $23 million worth of Milk Protein Isolate (MPU) and Ultra-filtered milk to Canada alone in 2015. Its gross sales for 2015 were roughly $110 million. With its gross sales for 2016 expected to reach $150 million, the company said sales with Canada are expected to exceed $30 million. As a result, any serious trade barrier could cost Cayuga Milk Ingredients millions of dollars in sales and stifle potential growth. Schumer said the success of this Cayuga County company’s substantial investments as well as its products hinge significantly on the ability of Cayuga Milk Ingredients 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 Cayuga Milk Ingredients and even Canadian cheese makers. Therefore, Schumer is urging 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 was joined by Cayuga Milk Ingredients CEO Kevin Ellis and Board Chairman Bill Morgan. Chairman Morgan is also a local dairy farmer, operating a dairy farm of 800 cows in Scipio, NY and another with 600 cows in Adam Center, NY.

“America’s dairy farmers appreciate Senator Schumer’s leadership in helping call attention to the importance of maintaining access to one of our closest and largest foreign dairy markets: Canada. It’s essential that the U.S. firmly reject the prospect of regulatory maneuvers by Canada designed to make it harder for U.S. companies to access export opportunities they have worked so hard to build,” said Jim Mulhern, President and CEO of the National Milk Producers Federation.

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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