Photo courtesy of Boehringer Ingelheim
The Trump administration announced July 1 it will not renew USMCA in its current form, triggering the agreement’s annual review process while keeping all existing trade provisions—including dairy tariff-rate quotas and rules of origin—in force. The move does not disrupt current dairy trade but keeps long-standing issues, including Canada’s dairy market access, on the negotiating table.
Interestingly, one week earlier, while speaking June 24 at the Center for Strategic and International Studies (CSIS) conference, Three Nations, One Table: North American Agriculture Under USMCA, Gregg Doud, president and CEO of the National Milk Producers Federation and former U.S. chief agricultural negotiator under the first Trump administration, described dairy as one of North America’s most integrated industries.
“I think one of the most fascinating conversations on integration is dairy between the U.S. and Canada. I mean, we have facilities on both sides of the border, very close to each other, and there’s stuff going back and forth all the time, which makes it really complicated to know what the real trade is,” Doud said.
His observation reveals a challenge ahead. While the U.S. operates under a market-oriented milk pricing system built around Federal Orders that are benchmarks, not guarantees, and Canada relies on administered pricing through fat-based milk production quotas, dairy manufacturing has become increasingly integrated as it straddles the border with investments in the U.S. by Canadian-based companies, including at least one prominent Canadian-farmer-owned-
As negotiations move forward, policymakers will be weighing not only market ‘access,’ but also where value is created and where it lands in an “integrated” North American supply chain and what else is being integrated in terms of ‘sustainability’ definitions, metrics and data collection. In today’s ag and dairy economy, the question of what crosses the border is much more complicated than it was six years ago.
