This thread almost makes me grateful for being lactose intolerant.
And if you read my subsequent posts, you will see why your point makes zero sense … Canada is a net exporter of wheat in the global market, it cannot possibly be the case that wheat is more expensive and less abundant in Canada, as you have argued. If you were right, Canada would be importing wheat, not exporting it!
Please, if you are going to make a factual argument, ensure you have some basis for it (hint: length of growing season is one factor in the economics of wheat production, but not the only one).
We actually have the technology to look at this. Average mean temperature in January for Montreal is 16F, average for Madison is 18.75.
LOL, the Americans on this side of the continent say the same thing. 
In our case, it’s 50 lbs of cheese instead of all the milk. You guys pay about 50% of the price for Jarlsberg.
I wonder what my local border guard is going to say, now that there are tariffs on dairy and other foods…
You realize it’s like this at literally EVERY land border crossing in the world, right?
In Singapore they used to go to Johor with their tanks on empty because gas was cheaper there. There is always something that’s a bargain on the other side of the line. And there are always people doing as you describe, going both ways, at all border crossings.
It doesn’t have any deep political or trade implications.
Is Canada a net exporter of cattle feed? Generally wheat isn’t used for that and that’s what I thought you were trying to contest.
Before we can get to the story, we need a reputable source indicating that a 270% tariff actually exists.
Jarlsberg, by the way, the result of a intense campaign to have a market for excess production of milk in Norway. Heavily subsidized through special export subsidies on top of national security based agricultural subsidies, because Norway is a high cost country to begin with, and doesn’t have the climate and geography for big dairy operations, but those subsidies are being phased out, and more production is moving out of Norway as a result.
Tariff exempt quotas for ag. products:
http://www.international.gc.ca/controls-controles/notices_avis/exp/list_liste/509-access-quant-acces.aspx?lang=eng
Selected dairy tariffs: (there are a bunch)
The law of comparative advantage says that if another country makes something so cheap that it is cheaper to buy it than to produce it then you are making your country poorer if you insist on making it in the country. This is why most people buy their clothes at the store rather than making their own. There is no realistic scenario where Canada is cut off from the world supply of milk and has to do without.
I didn’t realize that, thank you for your post.
But there are plenty of scenarios where Canada’s farms stop producing and instead we buy basic commodities from outside. We are then at the mercy of US price fluctuations and supply or weather problems.
Huh, weird. I guess I have the Norwegian taxpayer to thank for cheap Jarlsberg.
Thänkän yöunen taxpaydords Norsk.
It doesn’t need to be international borders either. States have different excise taxes.
I don’t know if it’s the case anymore, as it’s been a while since I smoked, and even longer since I bought cigarettes, but the gas stations in northern Kentucky used to be full of Ohio plate cars picking up cartons of cigarettes over the difference in state taxes on tobacco.
Because the US is the only possible country Canada could buy milk or a milk substitute from?
Again, if this is really the concern, then do away with supply management and simply don’t allow imports of milk/substitutes or have tariffs which insure enough milk/substitutes are made in Canada. You don’t need supply management for that. Supply management is nothing other than an industry getting the government to establish a cartel for the benefit of industry members. Would abolishing the supply management system for maple syrup pose an existential threat to Canada?
If the goal is to save jobs, then we could have a law which states that farmers are only allowed to work with their right hand. That way, we would need to employ more farmers and create more jobs!
Canada’s supply management is about making sure the price stays stable, producers get their costs covered, we get milk processed as we prefer. We manage it so we produce what there is demand for.
The US produces excess, which requires new markets, and without government buying and destroying the excess, threatens to crash the price for producers.
It’s a philosophical difference in approach, to an important economic sector, and the supply chain of an important food staple. Shrug. Potato/ potato. Trying to paint it as nefarious is disingenuous I think. American dairy farmers see a market they could effectively seize from the current producers. Our healthcare system is often under similar pressure from the very powerful players that control your system. The same can be said for the NRA gun lobby. I don’t think the average American really understands the kind of economic pressures our economy is unendingly under, from our southern neighbour.
We have chosen slightly different paths to similar goals. Why are such differences seemingly suddenly a source of somuch conflict?
Not for nothing, but you are talking about absolute advantage here (when another country can produce something so cheap that you can buy it from them cheaper than you can make it).
Comparative advantage is when your country could produce a commodity more cheaply than the other country, but it sometimes still makes sense to import because the capital and labour freed up by not producing the commodity locally can be repurposed to something else more productive. (I.e. your country would end up poorer by not importing because the opportunity cost of making locally is higher, even if the cost of the domestic product is lower).
You missed the other aspect of supply management. Yes, it’s a cartel like OPEC to keep prices high. What happens with OPEC? Nobody can enforce their agreed upon quotas, so everyone cheats and the price goes down due to oversupply. A marketing board enforces market shares - quotas.
Without a cartel, you would still have overproduction. Everyone would be tempted to overproduce, because one more cow won’t hurt that farmer. But if everyone has a cow (sorry, Bart) then the overproduction drives down prices and all the farmers live lives of desperate poverty. Even worse, it could become cyclical. Everyone overproduces, driving the price down, so too many get out of the business, and the price soars because supply is scarce. Rinse and repeat. The marketing board adds stability.
Also, yes, the USA is pretty much the only source of milk. Milk is not something easily loaded into containers and shipped across the ocean… Fresh milk in my store is lucky to have a best-before 3 weeks away. Unless it’s going to be airlifted from Europe or New Zealand, it’s not going to be very saleable by the time it finishes the journey. Typically longer distance imports would be in more preserved forms - cheese, ice cream, etc.
And… Wisconsin apparently has as many dairy cows as all of Canada. They could easily flood the Canadian market and drive down prices with their surplus production if left unchecked.
Saying that all farmers will live lives of desperate poverty is hyperbole. It would have an effect at the margin, much like most economic phenomena, which would result in fewer people being farmers, just like has been happening in the last few centuries. Should gov’t have ensured prices didn’t come down for farmers and people moved away from farming when farmers were 90% of the population? ,Or is it just that creative destruction is ok as long as it’s not in the present?
This idea that if there isn’t some central authority to control supply (and indirectly, prices) will result in everyone being in desperate poverty is nonsense. It’s central control of supply and prices which creates poverty, as the 20th century showed.
Note that your argument here is about economics, not just farming. If it’s true that without a cartel, there will be overproduction which will drive down prices and result in all producers living in desperate poverty which then result in too many going out of business and prices soaring, then we should have supply management for everything. Now, you’ll say “But farming is a special sector!” and then I’ll ask you to reread your argument and see that the cause-to-effect you claim is a general one, not one which relies on farming being a special sector.
ETA: Note that none of this means the gov’t shouldn’t intervene to protect people from desperate poverty. It should just be done in less market-distorting ways than supply/price management. It does involve some pain and the counterintuitive realization that fewer people being employed in a specific occupation is, overall and over the span of decades and centuries, a good thing.