What Can The Dairy Industry Expect From Trade War With Canada

After the Labor Day weekend, Canada is expected to implement tariffs ranging up to 50% on hundreds of American goods, including dairy. Between the added tax and additional restrictions on U.S. dairy imports, industry leaders are warning that farmers will feel the effects. Edge Dairy Farmer Cooperative's Karen Gefvert said Canada remains one of dairy's most important export markets.

“So they’re valuable as far as a geographic location," Gefvert said. " But the're also really valuable as far as a market for U.S. dairy products. They are our second-largest market for U.S. dairy products as of 2025. So, it's really important from a dairy perspective that we continue to maintain a working relationship with Canada for an export market. When we look at 2025 numbers, we value the amount of dairy exports that went into Canada at $1.3 billion."

Gefvert stressed losing access to that market would create a surplus of dairy products at home and put downward pressure on milk prices received by farmers.

"When we look at what the implications are for dairy farmers, if we were to reduce access to Canada, now that's going to put pressure on the milk prices because it's going to limit where our products can go," she said. "And so if we have more products sitting here domestically, those export markets to other countries take time to find and develop and work through that process. So, there is going to be some negative pressure.”

The impact wouldn’t stop at the farm gate. Gefvert said an escalating trade dispute could disrupt the entire dairy supply chain.

“So as we see this escalation occur between the U.S. and Canada, we anticipate breakdowns in supply chains," she said. "And what that's going to mean is less certainty, more risk. That's going to raise costs yet again for farmers who are already seeing increased costs in a lot of their inputs because of instability, because of tariffs, because of availability of those products. So we're going to see more raising of costs for farmers and processors. So, processors are going to have an impact on equipment that they need to bring in. That’s going to be subject to a steel or aluminum tariff that’s put in place. So, that’s going to either increase the cost of a project that’s underway or might delay a project that they had kind of slated to come along. That’s going to mean that farmers don’t have the opportunity to grow to fulfill that expansion that their processors may have. That just makes things tighter and more difficult for everyone.”

Gefvert added agriculture and food products are often the first targets of retaliatory tariffs because they have an immediate economic impact. The dairy industry continues to push for a negotiated solution.

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