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Schumer: Canada plan to restrict trade would ‘devastate’ local dairy industry

BATAVIA – A proposal by Canada to restrict imports of milk products would be “devastating” to the O-AT-KA Milk Products Cooperative and the region’s dairy farmers – and could lead to retaliation by the United States government.

That was the message sent by U.S. Sen. Charles E. Schumer at a news conference Friday at the Ellicott Street Road milk processing facility.

“Canada is trying to put in a new rule that would just be devastating for O-AT-KA and for our dairy farmers throughout Western New York,” Schumer said. “We’ve enjoyed good trade with Canada, and our Canadian neighbors have always depended upon a large supply of ultra-filtered milk to make cheese. A lot of their cheese industry comes from cows right here in Genesee County. O-AT-KA takes the milk and turns it into ultra-filtered milk.”

Schumer said the current free trade agreement would come to an end if Canada’s bid to impose restrictions and limitations becomes reality.

“There’s a new government in Canada and this government is trying to do something that would be very, very harmful for us – and harmful for Canada,” he said. “Because if they try to do things like this, we’re going to be tempted to retaliate, and everybody loses.”

The senator said Canada is considering taking administrative action that would limit the ability of domestic Canadian cheese companies to use ultra-filtered milk that is produced at O-AT-KA.

“That would bring our mutually beneficial trade relationship to a screeching halt,” he said.

“In addition, the province of Ontario is advancing with a new seemingly targeted proposal designed to keep out New York dairy sales,” he said. “This is going to mean huge problems for us. Plain and simple, our upstate dairy farmers, our upstate industries like O-AT-KA, could be put in grave jeopardy if these proposed rules are allowed to go forward.”

He noted that Canada isn’t dissatisfied with the product coming in from the U.S., but seeks to build up its own dairy industry.

According to O-AT-KA officials, about 20 percent of the milk it processes is exported to Canada. This year, with gross sales projected at $95 million, that would mean that the company would lose close to $20 million in business.

“O-AT-KA can’t afford to lose 20 percent of its sales. And it would mean that the best milk that Canada’s cheese companies could use – milk produced here – wouldn’t really be available,” Schumer said.

“Bottom line is this: If our producers, like those who sell their milk products through this successful conglomerate, were no longer able to tap international customers, the whole upstate dairy industry would be in peril.”

Schumer said he is reaching out to the U.S. Trade Representative and the U.S. Department of Agriculture to step in and stop this from happening. He said there is about a six-month window to get something done.

“We have to tell the Canadians we are serious about this, to tell the Canadians that a lot of their products that they export here will be in jeopardy if they do this – to send a real shot across the bow,” he said. “We cannot put our companies at risk … And I will use whatever clout I have in the Senate to make sure that happens.”

Schumer said the U.S. has “leverage” because of the amount of materials imported from Canada to America.

“If we were to threaten putting a similar tariff on some of the stuff they sell us, there would be meetings in Canada saying ‘get that undone.’ So we have leverage here. It’s not a one-way street.”

Upstate Niagara Cooperative has a 90 percent ownership stake in O-AT-KA and Dairy Farmers of America owns the remaining 10 percent. The cooperative completed a $16 million expansion project in 2013, adding to its milk processing capabilities. It employs 350 people.

William L. Schreiber, O-AT-KA’s chief executive officer, said any restrictions imposed by Canada would have a substantial effect on the business.

“We have made a significant investment to be able to make these products,” he said. “If that market was to go away, these assets would sit idle. Moreover, we would be forced to explore another market, and certainly at a lower price.”

About 50 people, including O-AT-KA officials and employees and local governmental leaders, were on hand for Friday’s news conference.