Showing posts from April, 2017

Is Canada really to blame for US dairy problem?

It seems each day that President Trump has a new enemy, this time Canadian dairy production is the new victim of his fury, but is his anger entirely misplaced? The short answer is that it is not misplaced, but "tearing apart NAFTA is not going to help fix the current US dairy glut, in fact it might worsen it. So what exactly is going on with US dairy? The answer is not quite as simple as Canada exporting more milk to the US. In fact Canada has a trade defect with the US for dairy. So what exactly is going on? Well a few days ago the Canadian government passed regulation which was more protectionist of Canadian dairy production. Canada has already had similar policies in place around dairy for some time, it is a system called supply management. It works like this, Canada determines the amount of domestic supply for dairy products and regulates foreign imports based on the degree of domestic demand in order to protect the Canadian dairy industry from foreign competition. The syste