(Bloomberg) — New Zealand, Australian and US dairy companies are accusing Canada of dumping low-priced milk products on world markets and are asking their governments to intervene.
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Industry groups from the three nations have written to their trade and agriculture ministers and officials expressing concern over the impact of “Canada’s trade delinquency” on dairy protein markets, the Dairy Companies Association of New Zealand said Thursday. Artificially low-priced Canadian exports are undermining legitimate interests, it said.
“Of concern is the purposeful design of Canada’s milk pricing mechanisms to under-price the surplus milk protein generated by its domestic supply management system and incentivize disposal onto world markets,” DCANZ said in a statement. “Collective and coordinated action is requested to address the mechanisms being used by Canada to enable these exports to be dumped on world markets.”
The action comes as the world braces itself for potential trade tariffs when President-elect Donald Trump takes office on Monday. Canada is one of the countries that have been singled out by Trump, with Ottawa drawing up a list of C$150 billion ($105 billion) list of US-manufactured items it could hit with retaliatory levies. Global milk supplies, meanwhile, are expected to grow this year, with output increases in all major exporters for the first time since 2020, according to Rabobank.
Australian and New Zealand government officials and two Canadian dairy associations weren’t immediately available for comment.
Wasted Milk
Almost 7 billion liters of Canadian milk worth around C$14.9 billion has been wasted since 2012, enough for a year’s supply for 4.2 million people, according to a paper published in the Ecological Economics journal in October. Canada exported almost C$500 million in dairy products in 2023, most of which went to the US.
New Zealand has a long-running trade dispute with Ottawa over access to the Canadian market. In October, it triggered compulsory negotiations under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, a free-trade agreement both countries are members of. New Zealand-based Fonterra Cooperative Group is the world’s largest dairy exporter.
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The Australian Dairy Industry Council’s chair Ben Bennett urged coordinated action to prevent surplus dairy products being exported at below-production cost, and called for the respective governments to use all available tools to hold Canada accountable.
The industry bodies want their governments to actively pursue the issue, DCANZ said. New Zealand and Australia are signatories, alongside Canada, to the arbitration arrangements designed to maintain the enforceability of World Trade Organization rules, while the US is set to review the US-Mexico-Canada trade agreement, it said.
“It is an ongoing battle to ensure Canada upholds its trade commitments on dairy,” DCANZ Executive Director Kimberly Crewther said in the statement. “DCANZ is pleased to be working with industry organizations from other dairy exporting nations who share the objective of holding Canada to account for its dairy trade commitments.”
–With assistance from Ben Westcott and Mathieu Dion.
(Updates throughout)
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