DAIRY BRIEFS

Export paradise lost
Mexico's peso collapse last winter killed dairy
exports to that country and throws into question
the concept of becoming dependent on other nations
for markets, says Hoard's Dairyman senior associate
editor Steve Larson. 
U.S. skim milk powder exports to Mexico in the
first half of this year were one-tenth of 1994
period sales. That's been good for Mexican dairy
producers because there is greater demand for
domestically produced milk and it also boosts
heifer sales, Larson says. 
American heifer sales to Mexico, for the first six
months of 1995, dropped by over 90 per cent
compared to 1994. A heifer that cost US$1,200
(4,000 pesos) a year ago now costs 9,000 pesos.
Larson says the best estimates for Mexican milk
production costs were 10 to 15 per cent higher than
U.S. costs before the devaluation. Now costs are
much higher. 
Larson says this is a rueful answer to the question
of whether countries should become dependent on
exports. "'If only we get government out of
farming, we would have prosperity', we've been told
time and time again. It's not that simple," he
said. 
Furthermore, Larson points out that policy and
marketing analysts in the dairy industry question
whether the U.S. should be a consistent supplier at
world prices even if they move up $1 or $2 a
hundredweight. 
If the American border were thrown open, not just
Canadians would be hurt, he asserts. 
A study of 259 New York dairy farms showed costs
ranging from C$30 to $32 per hl. A group of 875
Pennsylvania farms had average cash costs of
C$33.85 per hl.
 
NAFTA blasted
It's not likely to go anywhere, but a group of U.S.
congressmen have introduced a bill to kill the
North American Free Trade Agreement (NAFTA) unless
Canada and Mexico take measures to prop up their
currencies. 
Senator Byron Dorgan, North Dakota Republican,
called the NAFTA "a colossal failure" that failed
to live up to its promises. 
The legislation calls for Canada and Mexico to
raise the value of their currencies to make exports
less competitive, allow Washington to take
emergency trade measures if surpluses with the U.S.
get too high, reduce grain exports to the U.S. to
pre-NAFTA levels, and set minimum standards for
health, environment and human rights. 
Canada's trade surplus with the U.S. is expected to
rise to US$18 billion this year, up from $10
billion in 1993. 
Dorgan says he is supported by other senators and
23 members of the House of Representatives from
both parties who complain that NAFTA has killed
jobs instead of creating them.
 
Dairy wars
Beatrice won another battle last month in its
marketing war against rival dairy processing power
Ault. The provincial Farm Products Marketing
Commission has ruled that it was correct in a
summer decision disallowing Ault from distributing
its Lactantia brand PurFiltre milk in northern
Ontario. 
Ault began selling PurFiltre milk in northern
Ontario some time after it launched the product
last January. Approval to sell the new product
there had been granted by an acting director of the
commission the previous fall. 
In the summer, Beatrice, which also makes a
filtered milk product, complained to the
commission's new director Diane Coates-Milne that
allowing the Lactantia product to be sold in the
north contravened the commission's long-standing
policy to encourage the maintenance of processing
facilities in northern Ontario. The tribunal
concludes that while Lactantia PurFiltre milk is
produced using a new technology, it is essentially
a fluid milk product that is nutritionally the same
as regular pasteurized milk.
   

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