04.16.18

SCHUMER REVEALS: NAFTA NEGOTIATIONS GIVE CAYUGA COUNTY DAIRY FARMERS & MILK PRODUCERS RARE SHOT TO UNDO CANADA’S UNFAIR TRADE PRACTICES BUT FEDS MUST ACT NOW TO FIX POLICIES THAT HAVE PLAGUED CNY IN RECENT YEARS; SENATOR RELAUNCHES MAJOR PUSH TO LEVEL THE PLAYING FIELD & BOOST CNY AG & JOBS

In Recent Years Cayuga County Has Been A Victim Of Unfair Trade Policies That Have Prevented Locals From Selling Dairy Products Mere Miles North--But Now U.S., Canadian and Mexican Trade Officials Are Nearing A Deal THAT Seeks to Revamp The North American Free Trade Agreement (NAFTA) 

But Canada’s Efforts To Limit Market Access For U.S. Dairy Products Might Not Be Addressed & Schumer Says This Is Unacceptable; Canada’s Trade-Distorting Pricing & Egregious “Dairy Wall” Of Tariffs Has Cost Producers Like Cayuga Milk Ingredients -- And CNY Farmers – Tens Of Millions Of Dollars 

Schumer To Feds: Don’t Spoil Negotiations By Taking Dairy Off The Table

Standing at Cayuga Milk Ingredients, U.S. Senate Minority Leader Charles E. Schumer today called on U.S. trade officials to make it a priority to secure a level playing field with Canadian dairy producers during the renegotiation of the North American Trade Agreement (NAFTA). Schumer said that in recent years, Canada has established dairy pricing policies and has maintained high tariffs that have effectively created a “Dairy Wall” stopping certain American dairy products from accessing Canadian markets and distorting global trade. Dairy farmers and producers, like Cayuga Milk Ingredients (CMI), have been severely hurt by Canada’s manipulative trade practices and it will only get worse without action. CMI, a cooperative of 30 local dairy farmers with over 70 employees, has already lost tens of millions of dollars in contracts due to Canada’s actions. Schumer said that the time to secure a level playing field with Canada – by expanding market opportunities and eliminating Canada’s unfair pricing policies – is now and the U.S. cannot let this opportunity go to waste.

“Our hardworking New York dairy farmers and producers like Cayuga Milk Ingredients are the most competitive in the world, but they depend on stable and fair rules to compete in a global economy, to sell their dairy products, expand their business and create new local jobs,” said Senator Schumer. “As trade officials near a deal to renegotiate NAFTA – an issue President Trump and I both agree on – we must make it a top priority to begin reversing restrictive dairy pricing policies in Canada that are hurting our dairy producers at their core, and now is a real opportunity to do just that.”  

Schumer explained Canada has an unfair advantage over New York dairy farmers and producers. In addition to Canada’s 270 percent tariff on milk, a program called the “Class 7” pricing program, a market-distorting supply management system, has caused severe pain to New York dairy producers like Cayuga Milk Ingredients (CMI) since it came into force last year. In fact, Canada has used the Class 7 program to triple its milk powder exports in the past year by creating excess milk production capacity within Canada, then dumping the resulting milk powder onto world markets. To further prove this dumping exists, Schumer added that Canada’s dairy farmers are some of the highest paid in the world, yet Canadian dairy companies are still able to be among the lowest cost sellers of Class 7 products globally. Locally, CMI lost $30 million in annual sales within days of Canada’s implementation of Class 7, dealing a significant blow to the local agriculture economy. 

“In the four short days following Canada’s implementation of its National Ingredients Strategy to include a Class 7 milk price, CMI lost $30 million in annual sales.  It is clear that Canada’s sole intent through its Class 7 pricing was and is to manipulate the free markets by dumping their low cost skim milk products onto the World markets while simultaneously maintaining high tariffs to block imports of dairy products into Canada.  If Canada wants to maintain supply management, then they must manage their milk supply and not dump their excesses on the World markets.  I applaud Senator Schumer for his steadfast support of New York dairy farmers and his ongoing efforts to force Canada to dismantle its manipulated market distorting Class 7 pricing program," said Kevin Ellis, CEO of Cayuga Milk Ingredients.

As U.S., Canadian and Mexican trade officials are closing in on a deal to revamp North American Free Trade Agreement (NAFTA), Schumer said now represents a real opportunity to dismantle Canada’s market-distorting policies and ensure a level playing field for American dairy farmers and producers. Schumer noted that he has stressed the importance of the issue directly to past and current administration officials, including current United States Trade Representative Robert Lighthizer and President Trump, who have both expressed a desire secure meaningful changes in our dairy trade relationship with Canada. 

Cayuga Milk Ingredients, which opened in 2014, represents a cooperative of 30 family-owned dairy farms in the Finger Lakes and Central New York. Its plant in Aurelius, which employees 73 people and is within 40 miles of all co-op members, takes millions of pounds of milk and processes it to create milk protein concentrates and isolates, milk powders, and milk powder blends for the global food and nutrition industries. CMI has gross sales of $150 million per annum and provides a $300 million local economic impact each year. Schumer said that in order for CMI to continue to be a global leader, Canada’s rapacious dairy-related trade policies need to be addressed and that NAFTA represents a major opportunity to do so.

A Copy Of Schumer’s letter appears below: 

Ambassador Robert Lighthizer

United States Trade Representative 

Dear Ambassador Lighthizer: 

As the North American Free Trade Agreement (NAFTA) renegotiations come towards a conclusion, I would like to again emphasize the importance of securing meaningful concessions from Canada to provide stable market access for our dairy producers.  Securing meaningful and enforceable commitments that will allow U.S. dairy producers to compete with Canada’s on a level playing field should be a top priority in NAFTA renegotiations. As I have expressed to you many times, I strongly believe that we should not miss this opportunity to protect our dairy producers from Canada’s recent predatory trade practices.

As you know, Canada’s Class 7 pricing program, a market-distorting supply management system, has caused severe pain to New York dairy producers since it came into force last year. Canada has also maintained large tariffs on dairy products, including a 270 percent tariff on milk. New York’s dairy farmers and companies like Cayuga Milk Ingredients, O-AT-KA Milk and Ideal Dairy Farm, rely on market-based trade with Canada for a significant percentage – millions of dollars – of their revenue. Not only are New York’s producers locked out of Canada’s ultrafiltered milk market, but in just a year’s time Canada has used its Class 7 program to triple its milk powder exports, dumping powdered milk products into global markets and undercutting New York dairy producer’s exports. This Class 7 system is likely a violation of Canada’s World Trade Organization (WTO) commitments, but addressing it quickly through NAFTA renegotiation is needed, rather than waiting for years for a WTO determination. This Class 7 system should be dismantled through new NAFTA commitments.

In our discussions, you have committed to me that you would prioritize addressing this issue through NAFTA renegotiations. The President has also privately expressed to me his explicit desire to address this issue and has publically emphasized, many times, the unfair way that Canada has treated our dairy producers, noting just last month: “Canada must treat our farmers much better. Highly restrictive.”

Our hard working dairy producers are the most competitive in the world, but they depend on stable and fair rules to compete in a global economy. Again, I urge you to make meaningful and enforceable commitments that level the playing field for our dairy producers a top priority as NAFTA renegotiations conclude. 

Thank you for your attention to this issue.

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