Dairy Exporters Accuse Canada of Undercutting Global Markets with Low-Priced Milk Products
Concerns Over Canadian Pricing Mechanisms
The Dairy Companies Association of New Zealand (DCANZ) claims Canada’s milk pricing mechanisms are designed to underprice surplus milk proteins generated by its domestic supply management system. This practice, they argue, incentivizes the disposal of surplus products onto global markets at unsustainable prices.
“Canada’s trade delinquency is undermining legitimate interests,” DCANZ said in a statement released Thursday. “Collective and coordinated action is requested to address the mechanisms being used by Canada to enable these exports to be dumped on world markets.”
Calls for Government Action
Industry bodies from New Zealand, Australia, and the U.S. have written to their trade and agriculture ministers, urging them to use diplomatic and legal tools to hold Canada accountable. Ben Bennett, chair of the Australian Dairy Industry Council, emphasized the need for coordinated action to prevent the export of surplus dairy products below production costs.
DCANZ highlighted the importance of leveraging trade enforcement mechanisms, including the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which New Zealand and Canada both participate in. New Zealand recently initiated compulsory negotiations under the CPTPP to address its long-standing trade dispute with Ottawa over market access.
Broader Trade Tensions
This dispute comes at a time of heightened global trade uncertainty, particularly as the U.S. prepares for potential tariffs under the new administration of President-elect Donald Trump. Canada, singled out by Trump, has prepared a C$150 billion ($105 billion) list of U.S. manufactured goods it could target with retaliatory levies.
Impact on Global Dairy Markets
Global milk supplies are projected to rise in 2025, with major exporters such as New Zealand, Australia, and the U.S. increasing production. Rabobank forecasts this growth as the first simultaneous output increase among major exporters since 2020, intensifying competition in global markets already disrupted by low-cost Canadian exports.
The scale of Canada’s milk production surplus is significant. According to research published in the journal Ecological Economics, nearly 7 billion liters of Canadian milk worth around C$14.9 billion have been wasted since 2012—enough to supply 4.2 million people for a year.
Despite domestic inefficiencies, Canada exported nearly C$500 million in dairy products in 2023, primarily to the U.S. Critics argue that these exports, facilitated by unfair pricing, are distorting international markets.
Industry Leaders Demand Accountability
Kimberly Crewther, Executive Director of DCANZ, emphasized the importance of holding Canada to its trade commitments under World Trade Organization (WTO) rules and other agreements. “It is an ongoing battle to ensure Canada upholds its trade commitments on dairy,” she stated, adding that coordinated international efforts are essential for ensuring fair competition.
Next Steps
With global milk supply expected to grow and competitive pressures intensifying, the resolution of these trade disputes will play a crucial role in shaping the international dairy market. Industry groups are closely watching how governments respond, particularly as trade agreements like the CPTPP and US-Mexico-Canada Agreement are reviewed.
For now, Canada faces mounting scrutiny as dairy exporters demand accountability for trade practices they say threaten the livelihoods of producers worldwide.
