Friday: Second Thoughts From Dairy Industry On U.S.-Canada Deal

Friday: Second Thoughts From Dairy Industry On U.S.-Canada Deal

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In theory, the newly-minted trade deal between the U.S., Canada and Mexico stands to greatly benefit the dairy industry.

But at least one producer of dairy products in upstate New York is raising questions about the agreement, dubbed the United States-Mexico-Canada Agreement, or USMCA.

Cayuga Milk Ingredients, near Auburn, New York, buys the milk dairy farmers produce and makes what's known as "ultra-filtered milk." That can be either a liquid product similar to skim milk, or a powder product which is used for things like protein shakes.

Company CEO Kevin Ellis told 7 News Friday that based on what he';s seen so far, USMCA gives him pause.

"I'm 98% sure nothing will change," Ellis said.

The kind of milk Ellis's company produces was at the center of trade talks between the U.S. and Canada.

In early 2017, Canada created a new classification of milk, Class 7, which essentially boxed out American companies from sending "ultra-filtered milk" into Canada.

"Within four days, 100% of our exports stopped," Ellis said.

For Cayuga Milk Ingredients, that meant a loss of $30 million a year, about 20 percent of its revenue.

The new USMCA eliminates Class 7,.which in theory, reopens the Canadian market for companies like Cayuga...

But Ellis says not so fast.

"What I read, Class 7 is being replaced by a new pricing formula, that remains unnamed but looks to act just the same way as class 7."

Not every detail of the USMCA has been released, and the trade deal is a long ways from being finalized and adopted, so Ellis is still hopeful that the Canadian market could reopen.

"I'd love to be wrong. I hope I'm wrong," Ellis said.

If approved, most of the provisions in the USMCA are expected to take effect in 2020.

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