The recent ruling came in the first-ever use of a new dispute resolution panel established by the U.S.-Mexico-Canada Agreement, or USMCA. The U.S. contended that Canada used a complex set of tariff-rate quotas to reserve a share of the dairy market exclusively for Canadian dairy processors in violation of the 2020 pact.

“Today’s decision is an important victory for U.S. dairy farmers,” said Jim Mulhern, the president of the National Milk Producers Federation. “The United States and Canada negotiated specific market access terms covering a wide variety of dairy products, but instead of playing by those mutually agreed upon rules, Canada ignored its commitments.”

Canada didn’t commit to a specific course of action but acknowledged a Feb. 3 deadline to resolve the matter. In a joint statement, Canada’s ministers of trade and agriculture said they “continue to stand up for its dairy industry, farmers and workers and the communities they support.”

If Canada doesn’t come into compliance by the deadline, the U.S. could begin the process of initiating tariffs or other countermeasures.

Although Canada said aspects of the ruling were in its favor, the panel’s report contained only one ultimate finding—that Canada’s practices were inconsistent with its obligations in the trade deal.

The Trump administration filed an initial complaint about Canada’s dairy quotas in December 2020, leading to discussions between the two nations but no resolution.

In May of 2021, the U.S. escalated that complaint and triggered the dispute resolution process of the USMCA for the first time. The three-member dispute resolution panel was chaired by Elbio Rosselli, a diplomat from Uruguay, under USMCA rules designed to ensure that panelists are independent and have expertise in international law and trade treaties.

Canada’s dairy producers have long fought against opening their market. The country has around 11,000 commercial farms that hold substantial political sway because they are located in a politically important region: rural central Canada, especially French-speaking Quebec.

Source: Wall Street Journal

James MacDonald, a USDA researcher turned professor at the University of Maryland, analyzed decades of data and found:

• Farms with at least 2,000 acres of cropland operated 15 percent of all cropland in 1987. In 2017, these larger farms operated 37 percent of all cropland.
• In 1987, half of all dairy cows in the U.S. were in herds of 80 or fewer cows. In 2017, the midpoint herd size shifted to 1,300 cows.
• In 1980, there were about 250,000 dairy farms in the country. Today, there are 30,000.

“Consolidation in dairy is just dramatic,” MacDonald said, “with shifts to much bigger farms, and smaller farms going out of business. The very large farms have lower costs than midsize and smaller ones, and while those lower costs reflect productivity growth and result in lower prices for the consumer, it is also pretty heartbreaking for people who have been small or midsize dairy farmers who are going out of business.”

MacDonald found that family farms still account for the vast majority of farms and farm production. He said consolidation encompasses shifts of production to larger family businesses, but these are still predominantly family businesses.

Technology is driving the trend. Labor-saving equipment, materials, and organizational changes now allow a single farmer or farm family to manage more acres or more livestock. Advances in technology are often expensive to implement, but cheaper in the long run, so larger operations have an advantage and have lower overall operating costs.

The shifts in production are significant in 60 of the 62 crop and livestock commodities that MacDonald analyzed.

“This shift happens everywhere, in fruits and vegetables as well as field crops,” he said. “But with crops, we see a more steady evolution, whereas with livestock, you get spurts of dramatic change.”

MacDonald worked for the Economic Research Service of the USDA for nearly 40 years and is now professor in agricultural and resource economics. His findings were published in Applied Economics Perspectives and Policies.

Source: University of Maryland

Exports of U.S. dairy to China dropped by more than 50 percent in 2019, according to CNBC. The dairy industry is also facing competition from alternative products such as almond, rice, and soy milk.

In related news, Borden Dairy Co. filed for bankruptcy earlier this month, becoming the second major U.S. milk producer to do so in recent months. The filing comes less than two months after Dean Foods Co. filed for Chapter 11 in Houston.
Sources: The National Memo, Bloomberg

Farmers in the country are incorporating virtual reality into dairy production.

A farm just outside of Moscow is testing virtual reality glasses for its cows in an attempt to increase the quantity and quality of their milk.

The Ministry of Agriculture of the Moscow region says studies have shown that cows’ environmental conditions can impact the milk produced.

So, a team of developers, with the help of veterinarians and consultants for dairy production, adapted the human versions of virtual reality glasses to fit the cows.

The cows see an expansive field beneath the summer sun, in other words: cow paradise.

It’s unclear if the glasses have helped milk production. According to the release, a first test revealed a decrease in anxiety and an increase in the emotional mood of the herd.

Source: CNN

The farm-boat-combo, created by a company aptly named Floating Farm, has been selling the milk of its 35 seafaring cows since May, CBC News reports.

The mostly automated operation is intended to help make cities more self-sustaining in the face of a changing climate that threatens the area’s infrastructure.

The farm is a three-story barge, according to CBC. The cows live on the top floor. They can wander ashore when the barge is docked—eating local grass clippings, potato peels, and beer broth, and supplying manure to nearby fields.

A staff of two maintain the farm with three classes of robots: milkers, feeders, and poop scoopers.

“The entire process is completely automated,” CEO Peter van Wingerden told CBC. “What we are trying to do here is produce the highest yield of food with less people.”

Source: futurism.com

“We are within range of a substantially improved agreement for America’s workers,” Pelosi said in a statement. “Now, we need to see our progress in writing from (U.S. Trade Representative Robert Lighthizer) for final review.”

Even if Pelosi and Lighthizer formally announce their agreement soon, there’s very little time left on the legislative calendar for Congress to ratify USMCA before the end of the year. And, this is not the last hurdle to clear to finalize the tract pact.

The Pass USMCA Coalition, to which this Association belongs, continues to call on lawmakers to approve the trade pact.

In information it recently shared with members, it points out that this proposed deal gives unprecedented attention to small businesses, including establishing a special committee to help more small firms sell their goods internationally.

The trade deal also would increase the quantity of U.S. dairy products sold in Canada by 250 percent. It maintains the zero tariff and quota rates on certain U.S. exports at levels set by its predecessor agreement NAFTA.

Sources: Politico, Pass USMCA Coalition

Nearly 1,200 Wisconsin dairy farms have stopped milking cows since 2016, with 212 folding this year. Wisconsin herds are below 8,000—or half—compared to 15 years ago. The American Farm Bureau Federation said that 49 Wisconsin farms filed for bankruptcy in 2018—the most of any state.

Milk prices have declined within the last five years from $26 to $17 per 100 pounds, according to the USDA. Increased efficiencies in milking and corporate farming have also led to overproduction, especially as U.S. consumer tastes shift away from dairy. The circumstances contribute to a perfect storm for dairy.

Source: Axios