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World Trade
Organization

 WT/DS103/R WT/DS113/R
17 May 1999
(99-1924)
Original: English

Canada - Measures Affecting the Importation of Milk and the Exportation of Dairy Products

Report of the Panel

(Continued)

4. The price of milk to the processor

(a) Other Classes (Classes 1 - 4)

2.47 The prices in Classes 1-4 reflect the target return for sales on the domestic market. Although the prices for these classes are established independently in each province by the provincial marketing boards, the boards have agreed in the regional pooling arrangements not to have large differences in these prices.

(b) Class 5 (Special Classes)

2.48 To obtain dairy products under Class 5, the processors/exporters must apply for a permit from the CDC. A permit holder then presents the permit to the relevant provincial marketing board or marketing agency, which upon acceptance of the recommendation contained therein, provides the milk for export.

2.49 The CDC issues two types of permit for Class 5 milk:

(a) The first type of permit applies to the activities under Classes 5(a), 5(b), and 5(c) and is issued to processors/exporters on an annual basis.

(b) The second type of permit applies to Classes 5(d) and (e) and is issued to exporters on a transaction-by-transaction basis.

2.50 Prices in Classes 5(a) and (b) are set through a formula negotiated in and decided upon by the CMSMC. This formula links Class 5(a) and (b) prices to US industrial milk prices. The CDC collects the data and does the necessary calculations for the consideration of the CMSMC. The price of milk in Class 5(c) is negotiated between the CMSMC and the confectionery manufacturers.

2.51 Prices for Classes 5(d) and (e) are negotiated and established on a case-by-case basis with the processors/exporters. The CDC conducts these negotiations in accordance with the criteria agreed upon in the CMSMC.

Table 3 - Average Selected Milk Component Prices by Class and Product January to June 1997

Component Prices ($/kg.) $/hl
Class Product BF Protein OS Total
1a) Fluid milk 5.46 6.56 3.7 61.61
1b) Table Cream 5.43 5.22 3.58 56.62
2) Yoghurt and Ice Cream 5.43 4 3.89 54.37
3a) Specialty Cheeses 5.47 9.04 0.58 51.78
3b) Cheddar Cheese 5.48 8.59 0.58 50.4
4a) Butter, Ingredients 5.4 3.51 3.51 50.82
4b) Condensed Milk 5.44 3.62 3.62 51.71
5a) Specialty Cheeses 2.99 7.01 0.57 36.37
5a) Cheddar Cheese 3.05 7.01 0.57 36.55
5b) Fluid Milk 3.08 2.92 2.92 37
5b) Creams 3.05 2.92 2.92 36.89
5b) Yoghurt 3.05 2.92 2.92 36.91
5b) Butter, Ingredients 2.98 2.91 2.94 36.75
5c) Milk products for Confectionery 2.64 2.59 2.59 32.51
5d) Milk 2.18 2.18 2.12 27.28
5d) Cream 2.46 2.46 2.46 30.69
5d) Yoghurt 2.57 2.57 2.57 32.06
5d) Specialty Cheeses 1.94 4.87 0.51 25.37
5d) Cheddar Cheese 3.97 6.72 0.51 38.56
5d) Butter 1.83 1.83 1.83 24.91
5e) Milk 2.15 2.15 2.15 26.87
5e) Cream 2.2 2.2 2.2 27.47
5e) Specialty Cheeses 1.5 4.54 0.51 22.75
5e) Cheddar Cheese 1.86 4.92 0.51 25.23
5e) Butter 1.28 1.28 1.28 15.98

Notes: BF = butterfat, hl = 100 litres, OS = other solids

One hectolitre of milk = approximately 3.6 kg. of butterfat, 3.2 kg. of protein and 5.7 kg. of other solids.

Source: United States, Exhibit 22, An Inquiry Into the Importation of Dairy Product Blends Outside the Coverage of Canada's Tariff-Rate Quotas, Report of the Canadian International Trade Tribunal, June 1998 p. 13 (source referred to in United States, Exhibit 22: Canadian Dairy Commission).

To continue with Returns to producers from exports

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