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December 11, 2020 d's Dairy orl In W du e st h r t y g W n i e e v Since 1876 k r e l y S CHEESE REPORTER Vol. 145, No. 26 • Friday, December 11, 2020 • Madison, Wisconsin USTR Challenges Canada’s Dairy USDA Hikes 2020, 2021 Milk Production Tariff-Rate Quotas Under USMCA Forecasts, Lowers Canada’s Dairy TRQ Allocation Measures 3.A.2.11(b) because Canada is set- Cheese And Butter ting aside and reserving a portion Price Forecasts Appear Inconsistent With USMCA Provisions of the quota to processors. Second, the measures appear Washington—The USDA, in its Washington—The United States cation measures, Canada sets aside to be inconsistent with Arti- monthly supply-demand estimates is challenging Canada’s allocation and reserves a percentage of those cles 3.A.2.4(b) and 3.A.2.11(e) released Thursday, raised its 2020 of dairy tariff-rate quotas (TRQs) within access quantities for par- because Canada is not providing and 2021 milk production forecasts under the US-Mexico-Canada ticular importer groups. “fair” and equitable” procedures and lowered its cheese and butter Agreement, US Trade Representa- Under the USMCA, Canada has and methods for administering its price forecasts for both years. tive Robert Lighthizer announced the right to maintain 14 tariff-rate TRQs. Milk production for 2020 is pro- Wednesday. quotas on dairy products, includ- Third, the consultation request jected 200 million pounds higher If the US and Canada are ing industrial cheeses, cheeses of continued, the measures appear than last month, at a record 225.9 not able to resolve US concerns all types, milk, cream, skim milk to be inconsistent with Article billion pounds, on higher cow through consultations, the US powder, butter and cream pow- 3.A.2.11(c) because Canada fails numbers. may request the establishment of a der, milk powders, concentrated to ensure that, “to the maximum For 2021, the milk production USMCA dispute settlement panel or condensed milk, yogurt and extent possible,” the allocation is forecast is raised by 400 million to examine the matter. buttermilk, powdered buttermilk, made “in the quantities that the pounds from last month, to 226.3 As defined in the USMCA, a whey powder, products consisting TRQ applicant requests” as a result billion pounds, also on higher cow TRQ is “a mechanism that pro- of natural milk constituents, ice of reserving access of large shares numbers. vides for the application of a pref- cream and ice cream mixes, and of the quota to processors and so- USDA’s 2020 fat basis import erential rate of customs duty to other dairy. called “further processors.” forecast is reduced on lower imports of a particular originating For all of its dairy TRQs, Canada Finally, the measures appear imports of butterfat products while good up to a specified quantity (in- sets aside and reserves a percent- to be inconsistent with Article the fat basis export forecast is low- quota quantity), and at a different age of the quota for processors, and 3.A.2.6(a) because they “introduce ered on weaker foreign demand rate to imports of that good that for 10 of the TRQs an additional a new or additional condition, for cheese. The 2020 skim-solids exceed that quantity.” percentage is reserved for so-called limit, or eligibility requirement on basis import forecast is unchanged, Canada’s dairy TRQ allocation “further processors.” the utilization of a TRQ” that are but the export forecast is raised on measures set limits on the quan- This appears to be inconsistent “beyond those set out in [Canada’s] strong global demand for whey and tity of certain dairy products that with several USMCA provisions, Schedule to Annex 2-B.” whey products. may be imported at a lower (within according to the USTR’s consulta- A “key improvement” of the For 2021, the fat basis import access) rate of duty, the USTR’s tion request. USMCA compared to the North forecast is reduced on lower consultation request noted. Fur- First, the measures appear expected imports of a number of ther, through the dairy TRQ allo- to be inconsistent with Article • See Canada’s Dairy TRQs, p. 4 dairy products, but the export fore- cast is raised. The skim-solids basis import USDA To Buy $50 Biden Taps Vilsack To Be Secretary forecast is unchanged, but the Million In Butter, $60 export forecast is raised on larger Of Agriculture, Tai As US Trade Rep. shipments of nonfat dry milk and Million In Fluid Milk Washington—President-elect If confirmed by the US Senate, dry whey products. For 2021 Delivery Joe Biden this week announced Vilsack will become the first per- • See Lower 2021 Prices, p. 20 the selection of Tom Vilsack to son to serve two separate stints as Washington—The US Depart- US secretary of agriculture. ment of Agriculture (USDA) last be his secretary of agriculture. The International Dairy Foods Friday announced plans to pur- Vilsack has served as president Nov Avg Prices – 2019 vs 2020 Association (IDFA) is “pleased” Average CME Prices** chase $50 million in butter and and CEO of the US Dairy Export to see Vilsack’s nomination to Class 3 and Class 4 Milk Price x 10 $60 million in fresh fluid milk for Council since January 2017. lead the US Department of Agri- distribution in 2021 to various Prior to joining USDEC, Vil- culture (USDA), said Michael $2.80 food nutrition assistance programs. sack served as secretary of agri- Dykes, IDFA’s president and The purchases will be made culture under President Barack $2.60 CEO. under the authority of Section 32 Obama from Jan. 20, 2009 $2.40 An experienced mayor, gov- of the Act of August 24, 1935, through Jan. 13, 2017. Prior to ernor and agriculture secretary, $2.20 with the purpose of encouraging serving as agriculture secretary, Vilsack “has the knowledge and the continued domestic consump- Vilsack served two terms as the $2.00 understanding to hit the ground tion of these products by diverting governor of Iowa, in the Iowa running and make immediate $1.80 them from the normal channels of State Senate and as the mayor of progress on pressing issues facing $1.60 trade and commerce. Mt. Pleasant, IA. food, agriculture and the rural USDA plans to issue solicita- Vilsack was the longest-serv- $1.40 economy” Dykes said. “He has tions for the fluid milk (including ing secretary of agriculture since seen first-hand the pandemic’s $1.20 whole milk, 2 percent and 1 Orville Freeman, who served impact on health and jobs, and $1.00 percent) and butter in December as secretary from Jan. 21, 1961, Blocks** Barrels** Butter** NFDM** Class 3 Class 4 we’re hopeful that with his guid- until Jan. 20, 1969, under Presi- • See USDA To Purchase, p. 15 dents Kennedy and Johnson. • See Vilsack Named, p. 14 Page 2 CHEESE REPORTER December 11, 2020 Past Issues Read this week’s issue EDITORIAL COMMENT or past issues of Cheese Reporter on your mobile phone or tablet by scanning this ...if there’s one thing we’ve QR code. DICK GROVES learned about dairy trade over Cheese Reporter Publishing Co. Inc. ©2020 the years, it’s that countries have 2810 Crossroads Drive, Suite 3000 Publisher / Editor a lot more “weapons” in their ag Madison, WI 53718-7972 and trade policy portfolios than (608) 246-8430 • Fax (608) 246-8431 Cheese Reporter http://www.cheesereporter.com e: [email protected] just subsidies.. DICK GROVES tw: @cheesereporter Publisher/Editor e-mail: [email protected] 608-316-3791 MOIRA CROWLEY Cheese Export Subsidy Updates Seem Unnecessary, Irrelevant Specialty Cheese Editor Back on Nov. 5, the US Depart- pound provided by Norway to Fin- imports are filling a declining por- e-mail: [email protected] 608-316-3793 ment of Commerce’s International land’s 84.3 cents per pound. tion of the US cheese market. KEVIN THOME Trade Administration published To put this in some additional, By contrast, back in 1979, when Advertising & Marketing Director in the Federal Register its quar- and more recent, historical per- the Trade Agreements Act was e-mail: [email protected] terly update to the annual listing spective, we went back to 2002 passed by Congress and signed into 608-316-3792 of foreign government subsidies and found the notice of subsidy law by President Jimmy Carter, US BETTY MERKES on articles of cheese subject to an programs on cheese subject to an cheese production totaled 3.7 bil- Classifieds/Circulation Manager e-mail: [email protected] in-quota rate of duty covering the in-quota rate of duty during the lion pounds and cheese imports 608-316-3790 period Apr. 1 through June 30, Apr. 1-June 30, 2002 period. And totaled about 248 million pounds. REGULAR CONTRIBUTORS: 2020. in fact there were still quite a few Back then, cheese imports had a Jen Pino-Gallagher, Bob Cropp, Brandis This quarterly update included of those cheese subsidies during much larger, and more important, Wasvick, Dan Strongin, John Umhoefer exactly one “subsidy” program: that period. share of the US cheese market in You can e-mail our contributors at: [email protected] Canada provides export assistance For example, 13 countries were 1979 than they do in 2020. of 47 cents per pound on certain providing European Union resti- Further, as noted, the only cur- The Cheese Reporter is the official types of cheese. tution payments (there were 15 rent subsidy listed by the ITA is publication of the following associations: And this leads us to wonder why EU member countries at the time) Canada’s export assistance on cer- California Cheese & Butter Association the federal government continues ranging from two cents per pound tain types of cheese.
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