He explained that while high-value products continue to see strong demand, they have dumped some skim milk into lagoons in recent weeks.
Dietrich’s letter noted that all-milk quota was up 6.5 percent, year-over-year, and full quota is being met about half of the days in recent months. However, reaching capacity means there is not enough time to dry all the skim milk into powder, and therefore limits the milk that can be delivered to butter and powder plants.
The rumors come amid the Trans-Pacific Partnership trade agreement’s ongoing negotiations. A June 11 report by Agri-Food Economics, a Canadian firm that consults on behalf of clients, shows that Canada’s dairy trade deficit is growing, especially in products like milk protein isolates that are not subject to tariffs, in category HS 3504. First quarter 2015 imports of the category from the U.S. are up 64% over the same time in 2014.
Canada’s dairy exports were capped as result of a challenge by the U.S. and New Zealand that began in 1998. The case resulted in Canada’s butter, skim milk powder, cheese, other milk products, and incorporated products being capped due to the country’s special class pricing on exports being deemed illegal in 2003.
The country’s supply management system has been in place since the 1970 National Milk Marketing Plan was adopted by Quebec and Ontario. The European Union recently let its own supply management system expire on April 1, 2015.
Source: Dairy Herd
