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July 18, 2017

25,000 Dairy Jobs On the Line with NAFTA Renegotiation

 |  By: Jim Dickrell

Stan Ryan, president and CEO of Darigold in Seattle testified today that more than 25,000 jobs in the U.S. dairy industry are dependent on the North American Free Trade Agreement (NAFTA).

“An agreement that has done this much good and supports more than 25,000 in the dairy sector alone must be preserved,” Ryan told members of the U.S. House Ways and Means Subcommittee on Trade. His full testimony can be read here.

Ryan knows of which he speaks: Darigold had $1.2 billion in annual sales in fiscal year 2017, with 40% of those sales made outside the United States. “NAFTA has been the driving force behind remarkable growth in dairy exports and is the reason the United States’ share today of Mexico’s imports is 73%,” he says. U.S. dairy sales have grown almost 10-fold since NAFTA was approved, growing from $124 million in 1996 to $1.2 billion last year.

Mexico is currently negotiating a trade agreement with the European Union and looking into trade agreements with New Zealand and Australia. All three are significant dairy exporters and would love more access to North America.

Ryan also notes that U.S.-Mexico NAFTA negotiations must re-visit dairy trade with Canada. The original agreement exempted Canadian dairy products. Ryan notes that Canada’s new Class 7 pricing scheme “is actually eroding what little opportunity the U.S. had for sales in Canada, and even worse, it is being used to underprice dairy products from the U.S. and other major dairy suppliers in markets around the world,” he says.

“If Canada wishes to retain a government-run system of micro-managing its milk supply, that is its prerogative, but that does not give it the right to use the high returns from that system to disrupt with indirect subsidies the commercial dairy markets on which Darigold and countless other good-faith competitors in the U.S. and elsewhere rely,” Ryan says.

“Common-sense economics would say, if it looks and feels like subsidized dumping, it probably is,” he says. “This just started, and it will damage U.S. dairy export shares around the globe. We request that Congress work with the Administration to repeal it.”

You can view a video of Ryan's testimony here