Analyst considers maintaining access to Mexico the jewel for dairy in USMCA

A trade analyst discussing USMCA suggests maintaining access to Mexico is more important to U.S. dairy farmers than addressing Canada’s milk pricing system.

Rabo AgriFinance global sector strategist Mary Ledman says the notion that Canada would do away with its Class Six and Seven pricing under the new agreement is somewhat of a misnomer.

“They still have an advantage for milk being used in skim milk powder, nonfat dry milk powder, infant formula, and some other products.”

She says Canadians are using their make allowance in price calculation, which is about twice as much as the U.S.

While Ledman would welcome the opportunity to level the playing field with Canada, she’s much more bullish on the Mexican market.

“Which is far bigger for U.S. dairy producers than the Canadian market is. And I hope longer term that we can get more of our cheeses into Canada, and also exporting more cream. But the key reason why we needed a USMCA agreement was more about not losing market access to Mexico.”

Ledman made these comments Tuesday during a webinar hosted by the University of Minnesota and the I-29 Moo University Consortium.

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