Leading dairy exporter praises potential increased access to Canada

OMAHA (DTN) -- A group of leading dairy exporter praised potential increased access to Canada on Wednesday, but called on the Trump administration to drop steel and aluminum tariffs that have hurt dairy exports into Mexico, the top export market for products such as cheese.Leaders from the International Dairy Foods Association are in Washington, D.C., to talk to lawmakers about trade, including the new North American free trade agreement -- the United States-Mexico-Canada Agreement (USMCA) -- and the importance of getting the Trump administration to drop the Section 232 tariffs against Mexico.With the overall dairy industry exporting 15% of total production, getting more market access to Canada and dropping the Class 7 dairy pricing system in Canada are both going to provide more potential access to the Canadian market, said Michael Dykes, CEO of IDFA, in a call Wednesday morning with reporters. "We think it brings some certainty to the market to have a trilateral agreement," Dykes said.But Dykes added that Mexico is the top destination for dairy exports, taking up roughly 25% of all U.S. dairy exports. Exports to Mexico have reduced dramatically since the U.S. placed tariffs on aluminum and steel from several countries, including Mexico, which responded with a 25% tariff on dairy products. "Those tariffs have placed us at a disadvantage in the marketplace," Dykes said.Stan Ryan, President and CEO of Seattle-based Darigold, said his cooperative has 500 dairy farmers stretching throughout the Northwest into Montana. As much as 40% of the cooperative's production is exported as well. Ryan was pleased with the deal the Trump administration struck on dairy, but noted it was difficult to achieve."We're glad to be where we are. We're glad of the outcome of the USMCA," Ryan said.The deal boosts U.S. market access into Canada's domestic market by 3.59% with some specific tonnage quotas for various products. Ryan said more details are needed on enforcement and preventing "technical workarounds" like the Class 7 program that had limited U.S. milk products going into Canada. "We have got a lot more to do with this before we get ahead of ourselves," Ryan said.