Tag Archives: Dairy

Prime Minister Justin Trudeau says he has assured dairy farmers they will be compensated for their expected losses under the new United States-Mexico-Canada trade agreement.

Trudeau says he made the pledge as he met with dairy industry representatives in downtown Montreal today.

Canadian dairy farmers stand to lose 3.59 per cent of their market under the new trade deal, known as USMCA.

The prime minister says the government will be working with dairy producers in the coming months to determine the amount of compensation.

Trudeau says the dairy representatives told him today they are worried and that they have given up a lot in recent trade deals signed by Canada.

The prime minister acknowledged those sacrifices, saying he wants to ensure dairy farmers have confidence in the industry’s future.

Stalled talks between the U.S. and Canada regarding the North American Free Trade Agreement are expected to continue this week, as the U.S. desires to reach a deal by September 30th.

Informal talks are likely over the next few days, according to Reuters, as global attention turns towards a U.N. meeting this week. Canadian Prime Minister Justin Trudeau says nothing had formally been arranged for this week, however, leaving further uncertainty as to whether the U.S. will continue to seek a trilateral agreement.

The U.S. appears likely to forge ahead with a U.S.-Mexico only trade agreement until the U.S. can reach an agreement with Canada beyond the September 30th deadline. Trudeau offered some push back over the weekend, saying Canada would not be rushed into reaching an agreement and that he would not sign “a bad NAFTA deal.” Dairy market access remains a sticking point between the two nations, among a handful of other remaining issues.

Talks between Canada and the U.S. regarding the North American Free Trade Agreement are intensifying in Washington, D.C. Bloomberg says Canadian dairy farmers recently told Prime Minister Justin Trudeau not to use access to the protected Canadian dairy market as a bargaining chip.

The Dairy Farmers of Canada says it’s already lost $193 million because of past trade agreements and they won’t accept more losses. “The work of our lives seems to have been reduced to a bargaining chip,” says Dairy Farmers of Canada president Pierre Lampron. The group, along with the Dairy Producers of Manitoba, says farmers will hold Trudeau accountable for his promise to defend the supply-management system. The threat may have added strength because of Canadian national elections which come in about a year.

They say Canada’s market is too small to accommodate U.S. overproduction, saying the Class Seven milk targeted by President Donald Trump is worth protecting. Both groups issued a statement saying, “We will hold our prime minister accountable for saying he will defend supply management and dairy in the NAFTA negotiations. We have articulated clearly that the support means no access will be given to the Canadian dairy market.”

The United States still demands a dairy fix in the North American Free Trade Agreement, but Canada still wants to protect its dairy industry.

While Canada may be ready to give some concessions on dairy market access, Prime Minister Justin Trudeau and his allies have strong political motivations to stand firm. A trade lawyer told Politico this week that much of the focus is on Canada’s Class 7 milk, a class created last year that has disrupted trade between the U.S. and Canada.

The trade expert says those talks are “highly technical” and will take days to complete, but suggested an agreement is still possible, “even likely this week.” Talks between the U.S. and Canada are expected to continue with an overall goal to complete the agreement by the end of this month. Mexico officials are also back in Washington, DC to propel the handshake agreement between the U.S. and Mexico forward.

COLUMBIA, Mo. — Large supplies of meat and dairy, possibly record-setting tons, are coming to U.S. consumers.

For consumers, this can be good news with lower prices at grocery cases. For producers of beef, pork, chicken and milk it doesn’t bode so well.

In a mid-year baseline update for livestock and dairy, University of Missouri economist Scott Brown offers mixed outlooks.

U.S. consumers have shown strong demand. But farmers gearing up for rising exports grew their herds. With shifts in trade and tariff policies, uncertainties cloud markets. If exports falter, supplies will build in this country.

“It is difficult to pin down how much meat and dairy products will go to exports,” Brown says.

Combined per capita pounds of beef, pork, chicken and turkey will be almost 19 pounds more this year compared to 2014. That’s a 9.5 percent boost. Further, a 3.5-pound increase looms in 2019.

“Producers must hope for strong U.S. consumer demand,” Brown says. People eating more could keep products from piling up in freezers. If not, the growing supply moves through the market chain only with price cuts.

With that uncertainty, farm prices are projected to decline for fed cattle, hogs and chickens, Brown says.

“Beef export demand has grown thus far in 2018,” Brown says. For the first half of the year, those exports were up 196 million pounds above 2017. That helped offset a 480-million-pound growth.

For pork, exports grew 176 million pounds out of a 422-million-pound growth, January to June. “Weaker pork prices helped move exports,” Brown adds.

Beef cow herd expansion slowed in 2018. Drought stress on forage and water supplies helped slowing. Beef prices remain under pressure through 2020, Brown says. Demand for high-quality beef slows what could have been bigger price declines.

For hogs, increasing sow numbers with high production per sow pushed pork growth up for the last four years. Growth continues through at least 2020, Brown says.

Exports offset a large part of pork increases. That left per capita supplies at or below historical levels through last year.

Now trade doubts and production growth push domestic pork supplies next year to the highest levels since 1981.

Big supplies of beef and chicken compete with growing pork supplies. The result could be lowest the hog prices in a decade. That dollar drop can lead to financial losses for most hog producers.

Not helping pork is lack of return of the strong bacon demand in 2017.

On the poultry side, wholesale chicken prices hit records for three weeks this spring at $1.20 per pound. That had been seen only two other weeks in history. That was surprising, Brown says. Poultry production was high and chicken in storage was 10 percent above a year ago.

Chicken prices could retreat as production grows and demand returns to normal.

Turkey prices still struggle as they have for the past 18 months.

Egg demand regains footing following two years of low prices.

In the expansion mode, dairy cow numbers will likely grow in 2018 even as milk prices hit the lowest since 2009. Large herds in Texas, Kansas, Idaho and Arizona keep cow numbers largely unchanged.

Dairy exports have remained impressive, Brown says, although low prices triggered federal milk price margin protection for some dairy farms.

High production in livestock and dairy kept the consumer price index for food below 2 percent for the fourth year in 2018. The CPI runs less than the rate of inflation.

This baseline update came in conjunction with the MU Food and Agricultural Policy Research Institute baseline. That covers crops and biofuels. Reports are available at fapri.missouri.edu(opens in new window).

Livestock and dairy are covered by Brown and Daniel Madison in the MU Division of Applied Social Sciences. All are in the College of Agriculture, Food and Natural Resources.