U.S. dairy farmers look north to solve crisis

Canada’s supply management draws interest

WASHINGTON, D.C. • It’s a favourite grievance in President Donald Trump’s Twitter blasts at his northern neighbour: “Canada is charging massive Tariffs to our U.S. Farmers … Canada has treated our Agricultural business and Farmers very poorly.”

The source of Trump’s ire is the supply-management system that controls milk production in Canada and limits imports from the U.S.; America’s NAFTA negotiators want it dismantled.

Even in Canada, critics view supply management as an anti-competitive tool that artificially inflates consumer prices, while other trading partners have also complained.

But in the United States’ troubled dairy heartland, where low prices are forcing farm after farm into bankruptcy, many producers have taken a much different view lately — they’re actually embracing supply management as a potential saviour.

Representatives of the Ontario dairy marketing board toured Wisconsin in March and Michigan last month, drawing hundreds of farmers eager to learn how the system works. More trips are planned for later this year to Ohio and Pennsylvania.

“We had over 350 people participate in those five (Wisconsin) meetings — three of those meetings were standing room only,” said Darin Von Ruden, president of the Wisconsin Farmers Union. “We ended up way underestimating the amount of interest.”

His group held another four packed sessions after that, playing a recording of the Canadians’ presentation.

Meanwhile, the Dairy Farmers of America, the country’s largest milk-producers’ co-operative, passed a resolution at its annual meeting in March asking staff to investigate adopting something like Canada’s system for the organization’s 14,000 farmers.

Supply management aims to restrict production to meet demand, while allowing limited imports, ideally ensuring a stable price. Low prices in the U.S. are generally blamed on an oversupply of milk there.

Even agriculture groups more conservative than Von Ruden’s farmers union, while convinced the idea will go nowhere, acknowledge that curiosity is mounting.

“In these difficult times, when milk prices are very depressed, everybody wants to look at all the options,” said James Holte, president of the Wisconsin Farm Bureau, the state’s largest agricultural association. “There are a number of people interested in it and for good reason.”

With many farmers earning less for their milk than it costs to generate, there has been a steady exodus from the business in places like Wisconsin, the secondbiggest milk-producing state and largest U.S. cheese maker.

About 500 dairy producers sold off their herds last year, while over 50 went out of business just last month, in a state with about 8,200 dairy farms.

And there have been a spate of suicides, though often disguised as farm accidents to ensure that loved ones’ receive life insurance payouts, said John Peck of Family Farm Defenders, based in Madison, Wis.

“Every time the phone rings, that’s what I worry about,” he said. “There is just a massive bloodletting going on, and it’s really ugly.”

Hans Breitmoser Jr., who milks 450 cows near Merrill, Wis., and showed up at one of the meetings with the Ontario farmers, has seen the effects close at hand. A neighbouring dairy farmer went out of business recently, while the large-animal vet, feed mill and farm-implement dealers the community used to support have all disappeared in recent years.

“As we go through these boom and bust cycles in agriculture, we have a great potential to make ghost towns out of some of these small communities,” Breitmoser said.

Not only could supply management ensure that oversupply does not depress prices, it would render unnecessary the bailouts governments periodically pay to dairy farmers, say American proponents of the system.

“It’s not fair to the taxpayers when we have an industry that is set up to fail,” said Breitmoser.

Dairy Farmers of Ontario chair Ralph Dietrich, one of the two Canadians who toured U.S. farm country to promote supply management, said the dire straits south of the border are reminiscent of Canada before the program was implemented there.

“And where we are today is where … American farmers need to be,” he argued.

But in a country that champions free enterprise and individualism like few others, there remains ample opposition to anyone controlling what a farmer produces.

Holte of the Wisconsin Farm Bureau is convinced the majority of farmers are against it.

And with free commerce among states, supply management would have to be adopted nationally to work, requiring political will that doesn’t exist, and consensus among a disparate range of producers, he said. It would also play havoc with an export market many depend on, said Holte.

When a form of supply management was proposed for the federal farm bill in 2014, then-Republican House Leader John Boehner shot it down, labelling such a program “Soviet-style.”

THERE ARE A NUMBER OF PEOPLE INTERESTED IN IT AND FOR GOOD REASON.