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Trump vs Canadian Dairy farmers

24K views 129 replies 44 participants last post by  catranch 
#1 ·
Sounds like Trump declared war on Canadian Dairy farmers today in Wisconsin. Could this start the end to Quota as we know it? Who would pay for the $30 billion of value?
 
#6 · (Edited)
There is no question he is gonna be putting the pinch on Canadian commodities, I think he is awesome for the Americans, I wish we had a trump prime minister, instead of our jet setting playboy. This is just the start, like I said years ago, just wait, trump is gonna give allll those Canadian farmers along the border a swift kick in the arse, growing grain in Canada and trucking it to u.s. Elevators is gonna end soon for those guys.. just watch.

Remember, he said Nafta was a bad deal for the u.s., if anyone thought that it wasn't going to affect Canadian farmers, they are in a dream world. Soon the only products they will import will be the ones they actually need. And they don't need very many Canadian ag products.
The large American owned elevators located here in Canada will lobby to slow grain movement to the u.s. In an effort to drive our prices down, this way they can make a killing selling our grain. It will be another excuse like the railway backlog a few years ago.
Our pm is just gonna sit there like a little panting lap dog during all this.
 
#9 ·
The large American owned elevators located here in Canada will lobby to slow grain movement to the u.s. In an effort to drive our prices down, this way they can make a killing selling our grain. It will be another excuse like the railway backlog a few years ago..
Huh? That's just silly. Either the grain is going to cross the border or it isn't - you can't have it both ways. So if you're saying that US owned grain companies are going to lobby to reduce their cross border handle that seems counterintuitive - they make $/bu. On the other hand if they're going to "make a killing selling our grain" that's going to require volume which implies an open border.

The real issue issue is the supply managed sector which is simply indefensible. I'm not advocating that the existing supply managed farms should be hung out to dry - obviously their quota needs to be bought out and the Canadian taxpayer will have to take the hit. Its no different than the Crow payout. It has to happen. Everyone knows it has to happen. All anyone is arguing about is WHEN it is going to happen. Kudos to Maxime for having the balls to say it needs to happen now.
 
#12 ·
the quota system, while making a handful of primarily ontairo and Quebec diary farmers quite wealthy has really not done anything to protect the industry. it is almost impossible for new / young producers to buy in bc of cost of quota. Consolidation of the industry continues as fast as all other ag sectors. and is it an anvil around the necks of every other export based industry in Canada every time a trade negotiation comes up. Honestly if you look at it with another set of eyes, its pretty indefensible when we are exporting grains and beef into the US and they cant send dairy back. And it has been screwing us out west for years. we have the acres the feed and the space to be big players in the poultry business and have been all but shut out because of the quotas being tied to population.


It's really gotten to the point where its too big to buy out though. to buy out quota will cost some pretty serious coin. I'm sure l'il petey will be talking out of both sides of his mouth lots on this one!!!!!!
 
#14 ·
Nafta is getting blamed ,but I am sure the news reports a few weeks back explained that what actually changed was the Canadian Govt. had changed the standards for the filtered milk thus allowing it to be used where the U.S. milk had been filling the demand consequently that market was lost for the dairies previously shipping there from the U.S.
 
#16 ·
I thought American dairy products are illegal in Canada, Since we are not allowed any growth hormones or milk that has had antibiotics in it recent past. Am i wrong, they are very strict up here, and if you get caught, you can be raked over the coals quite badly from what i was told.
Is this true?

this is why we always looked for the blue cow on any products we buy.
 
#33 ·
We milk 340 Holsteins twice a day, so I'll take a stab at answering this...

American dairy products are not illegal, at least that is my understanding. They would be subject to import tariffs, so likely only higher end product has enough margin left to justify the hassle of importing? You are correct that growth hormone and antibiotic residue is a huge issue here, and there is no tolerance for any antibiotic residue in milk, period, but that is true on both sides of the border. Posilac (the growth hormone that increases milk production) is legally available in the states but has never been in Canada. There is no test to determine if it has been used though, any American dairy product that claims hormone free is relying on signed declarations from the producers supplying the plant.

As for the broader topic, as soon as someone figures out how I can keep my milk on farm and not sell it to the processing plant and wait for prices to rise, then I will think seriously about moving away from a quota system ;)

I realize I am way oversimplifying a very complex and nuanced subject, and I know that there are production and price contract mechanisms in the free market, but eventually and fundamentally, the processors know that we can't not sell our milk every day, and that profoundly influences every aspect of milk marketing.

For the specific situation that trump has stirred up discussion on, my understanding goes like this...
- for quite a few years up til now, ultrafiltered skim milk (no fat, basically a liquid milk protein product) has been classified as a food ingredient rather than a type of milk, and has therefore been able to come into the country without import tariffs. This has been used quite a bit in cheese making, yoghurt too a bit, making the argument that it's not really milk pretty weak in my view
- this has contributed greatly to a buildup of skim milk powder in Canada (the fat is still valuable, but the protein was being sourced elsewhere) and occasionally processors just taking the cream and dumping the milk down the drain. Not a great way to do business and feel proud about feeding the world
- discussions have been happening for years to try to tweak the system so that the Canadian system can function more effectively. The new regulations alllow for Canadian processors to pay international market prices for Canadian milk that gets made into this difiltered milk protein concentrate, and puts import tariffs on foreign milk protein products, choking off a large amount of the American exports of this stuff to Canada
- one American processor in particular has issued notices to dairy farms that since the uses changed, they have no market for those farms milk anymore, and won't be picking up their milk anymore. Their business model was heavily dependent on exports to Canada and they are creating an unbelievably gut wrenching situation for those farms affected. But they have had months, if not years to realize this change was brewing.
- so yeah, the Donald is apparently going to swoop in and save these farms from their processors shortsightedness by declaring war on Canadian dairy farmers. Or something like that......

I've gotta milk cows in 7 hrs. I'm heading to bed now ;)
 
#19 ·
I was going to leave this thread alone but there's some Quebecois nitwit on CTV right now defending supply management.

Several years ago I listened to a young dairy farmer from Ontario at some convention. The inevitable question came about how he could sleep entering an industry where his quota could be sold out from under him overnight. His answer stuck with me.

He said that they concentrated all their energy on being the best they could be. They were in the top 99th percentile for any objective measure of success - feed efficiency, productivity, somatic count, etc. He went on to say that milk would always be consumed and some of that would be local milk no matter what the government did vis a vis international trade. His conclusion was that, as long as they were among the best of the best, they would continue to produce milk and the only thing they needed to trust was that their government would treat them fairly if it negotiated the end of the quota system. We could all learn from that focus on excellence.
 
#26 ·
Don't quote me on this...

I read we have a $15 billion trade surplus with USA. Donald Trump will balance that out however he see's fit.

My perspective has always been, Canada need to stop trying to be the worlds cheap source of of exportable goods. Everything that is mined, or grown in this country is on sale at wholesale prices... Watched the local lumber industry get bought up by huge foreign company's the past 20 years, mothballed all the plants and walked away with the rights to the timber. No different than foreigners buying huge tracts of land for "farming"........"the government".
 
#29 ·
Well rather than just go on and on about sensationalism and anti Trump, how about we focus on the facts and who is really behind what's going down.
This is not something that Trump dreamed up on his own, he is simply speaking out what numerous groups, organizations and people are saying.
Takes a bit to find anything online that really presents their side, but I did find this article...

Canadian milk pricing scheme causes major disruptions in U.S. dairy

I for one am not a supporter of the quota system, and as far as NAFTA goes, well things like COOL, BSE and softwood lumber all come to mind where the US clearly, openly and purposely violated the agreement...but oh ya, that was all before Trump was POTUS, **** COOL was going down under beloved Obama now wasn't it?

Given the amount of people involved, gotta be some on here from the States who agree with what the posted article states, I for one would like to hear them explain themselves and why they hold the position they do. Right now, roughly for every dollar of dairy products Canada exports to the US, we are taking back in from the US almost five...the math here don't support what is being said at all...so whats up guys?
 
#31 ·
if the deal with the eu is any indication of how this will go, its not looking too rosy.

i feel concessions are on the way, opening a part of the market to american products but it will probably be a bargaining chip to get another deal on a different commodity. just keep looking for that blue cow at the store...

i'm a believer in the quota system, i feel it guarantees the farmer a fair price but also provides the consumer with a high quality product.
 
#32 ·
I understand that restricting milk production is called quota, and restricting labour is called a union. I also understand if I bought shares for 100 a share, and the value falls to penny stock I am on my own. How is buying quota any different than buying shares? I wonder how many people here would feel comfortable to have Pretty boy run their business for a couple years if they were incapacitated? Personally I do not think I would have much left to come home to but a bunch of selfies
 
#34 ·
Well said caroncrest.....I'm a dairy farmer also. Also a comment about the earlier posts about Hutterite Colonys......the amount of milk produced in Canada by Hutts is so small in the big picture that it wouldn't change the stats too much. 2016 stats say about 11200 dairy farms in Canada.....approx 32 billion in quota assets. Interesting times ahead but I'm not losing any sleep.....whatever happens.....happens!
 
#35 ·
Look at europe several countries got rid of the quota system and nobody paid a dime, they took 5 years to take it off and told the dairy guess to get ready, sucked for them but it allowed poeple with good results to grow and young guys to enter the industry wihout borrowing millions for quota.
 
#41 ·
5 years is gonna be better than when the farmland bubble pops and some farmers will be instantly broke. This shouldn't be sneaking up on anybody because this system we have here is very protectionist and a huge trade irritant. The feds should have unwound this a long time ago before quota got so expensive but was pandering for votes like usual and took a pass on the hard choices. Now the supply managed industries have consolidated themselves out of any real voting influence. Hopefully it is a soft landing but I would be real nervous.

I actually looked at getting into chickens years ago when they had a lottery system for some free quota every year. Even with some free quota I could not reconcile the cost of entry with the margins and the risk involved....plus I didn't really want to deal with a barn 365 days/year. I have great respect for the guys who do those jobs and the commitment it requires.
 
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#36 ·
I find it interesting the comment about "borrowing millions to buy quota". Have you priced out good farmland lately.....it's also millions! Farming is an expensive game. 100 kilos of quota is roughly 2.5 mil.... depending on where you go you may or may not be able to purchase 1000 ac with the same money. The quota will keep a family very busy 7 days a week 365 days a year and they can make a good living......not many people are making their full time living on 1000ac!
 
#38 ·
I thought there was a futures market for milk the same as corn and beans. You do not need to keep milk a home for a price to appear. You can forward sell, sell and buy back etc When somebody has been treated special, being treated equal will never be good enough. Applies to a lot of the Canadian landscape, including women in politics etc
 
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