Threats to supply management concern dairy farmers

To Dave Loewith and his relatives, it’s a threat to the business model that has given them a level of financial security that many farmers can only imagine.
His parents, Joe and Minna, took up dairy farming just outside Hamilton, Ont., in 1938. They escaped Europe just ahead of the Nazi hordes by promising to farm in Canada for five years. They moved to their current location in Lynden – between Hamilton and Brantford – in 1947. Today, Dave Loewith and his brother Carl are partners in the venture.
Farming has always been a financially risky business where producers have little or no control over the final price of their products. Since 1965, however, Canadian dairy producers like the Loewiths have benefited from a system called supply management.
The program seeks to balance the amount of milk produced by the country’s 12,000 dairy farms with the amount processors need to meet consumer demand. By maintaining that balance, the system ensures stable prices for farmers like Loewith, ensures they don’t have to rely on government subsidies and avoids the oceans of surplus milk now washing over American farmland.
In 2016, Canadian farmers received an average price of 79 cents a litre, compared to 49 cents in the U.S. (Both figures are in Canadian dollars.)
“Supply management gives us stable prices so we don’t get huge spikes in production, like the Americans do,” said Ben Loewith, Carl’s son and Dave’s nephew. “We also have a guaranteed market and that’s important because when prices drop, I can’t just layoff a shift until things pick up gain.”
A key part of the system is a wall of tariffs – some as high as 300 per cent – designed to keep imports from upsetting that careful balance of supply and demand.
That’ what has Trump so outraged.
In one recent outburst, for example, he called the system “very unfair to our farmers. Our farmers, whether it’s through a non-tariff trade barrier or whether it’s through very high tariffs … You can’t do that. It’s going to stop, or we’ll stop trading.
“We’re like the piggy bank that everyone keeps robbing and that ends.”
For the Loewith family, however, what’s really behind the president’s rants is a desperate need to export surplus American milk.
“Even the Americans admit the problem for them is surplus,” Ben Loewith said. “Tariffs are important for us because without them, the entire Canadian dairy industry could be washed away by the surplus milk from Wisconsin alone.”
According to Dave Loewith, the American system has led to numerous problems, including an increase in bankruptcies and suicides on U.S. farms.
“I just can’t wrap my head around what they see in that American system,” said Ben Loewith. “We can’t give up supply management, not when there’s a world over-supply problem like there is today.”
Both Loewiths say the Canadian government is doing what it can to preserve supply management, despite mounting challenges from a world awash in surplus milk.
One of those challenges was expressed in a June 26 letter to Trump from more than 60 American dairy products businesses, commending the president “for his efforts on equitable trade and for insisting that Canada halt its market-distorting dairy practices.”
Whatever happens in Canada-U.S. trade negotiations, the Loewiths see more problems looming for their industry and the enviable position it enjoys in Canada.
Chinese dairy farms, for example, are becoming more efficient, a development that could first eliminate a valuable market for exports and later create a massive flow of milk into world markets.
“It’s terrifying to me when politics half way around the world threaten to affect my prices in Ontario,” Dave Loewith said.
By: Steve Arnold
Source: Canadian Jewish News
Link: http://www.cjnews.com/news/canada/threats-to-supply-management-concern-dairy-farmers