Courtesy of reddit but an interesting perspective
PM Trudeau, when you meet President Trump about the milk thing, please tell him that... (self.canada)
submitted 2 days ago by professeurbambam
The American people have pulled the exact same stunt on Canadians oil sands business with their US oil fracking.
The problem of American "ultra-filtered milk", a milk protein rich syrupy mixture designed for cheese production, comes from the fact that the USA produce more milk than the market needs.
Because of CETA (the Canadian European Trade Agreement), Canadian cheese makers had to curtail their yearly production by 17,700 tons, the equivalent of the entire cheese production of Nova Scotia, in order to make room on store shelves for European products.
Because Canadian cheese makers make less cheese, they also need less "ultra-filtered milk". Because it is cheaper for Canadian cheese plants to buy locally produced milk than American milk, then Canadian cheese makers stopped buying American "ultra-filtered milk", which may cause some US farmers to go bankrupt because they produce milk the market doesn't need.
The oil sands in all of this
Because the USA decided to heavily subsidize oil fracking in the USA, the Saudi have lowered the price of oil to try to "kill" the fracking industry in the USA. But because the USA decided to maintain and even increase their oil production through fracking, the price of oil has remained low.
The desire of the USA to produce their own oil through fracking has caused Canadian oil sands to be priced out of the market and has caused Canada to lose tens of billions.
So, in essence, the unraveling of the Canadian oil industry takes its source in the desire of the USA to flood the market with their OWN OIL... Even if fracking is a more expensive production method, resulting in more expensive oil, the US government uses subsidies to make it look cheaper.
This is analogous to the milk production problem, the USA produces too much milk, more than the market needs, and when Canadian cheese makers decided to buy cheaper Canadian milk, the US farmers were priced out of the market, EXACTLY like the Canadian oil sands were priced out of the market by US oil fracking.
At the end of the day, if President Trump is to accuse Canada of unfair practices costing US farmers millions, Canada would also be right to accuse the US government of unfair practice in the oil industry, costing Canadians TENS OF BILLIONS.
**At the end of the day, Mr Trudeau, you cannot allow the USA with getting away with killing our oil industry and, at the same time, letting the USA bully Canada by accusing it of unfair practices in the dairy industry, because, after all, the source of the problem is that the USA produces too much milk, more than the market needs.
[–]rush22 1692 points 2 days ago*
Milk is the "oil" of the food industry. It isn't some random commodity that isn't that important. It's very similar to the oil industry.
The US government even has a mandate to stockpile dry milk (powdered milk) just like oil reserves. Ocassionally US dairy farmers are paid to not produce milk and instead they act as commodity traders and only purchase and sell dry milk.
The US has, in the past, over-produced subsidized exports of milk in order to collapse dairy markets so they can take over other national markets, as a form of protectionism for their own dairy industry. Instead of regulation to protect their industry, they go on the offensive.
The common example is the Jamaican dairy industry. The US flooded their market with under-priced powdered milk. That, combined with a heavy-handed advertising campaign that claimed powdered milk was more healthy and had more nutrients, collapsed the national Jamaican dairy market entirely and they were left with no more dairy farmers on the entire island. They went from producing all their milk locally to today where they import almost all milk at the same price and sometimes higher. The re-investment for local production is too high.
Stories you here about "humanitarian relief" shipments of milk are also often market manoeuvres intended to flood and collapse local markets so they can't recover. This is why entire cargo ships full of "free" milk from the US sometimes get turned away, or countries will claim they are "tainted".
So this kind of thing isn't some "oh this is just some interesting weird milk thing," it is actually quite important in the grand scheme of things. It sounds like "ultra-filtered" milk concentrate is being positioned as a new "dry milk" since it can currently circumvent existing trade deals and tariffs that deal with dry milk.
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