ABBOTSFORD, BRITISH COLUMBIA — Every two days, 28,000 litres of raw milk depart Casey Pruim’s farm in Abbotsford, western Canada, entering a distribution network predicated on the assumption that the milk and its derivatives will find a destination.
While the majority is consumed domestically, a portion was historically sold across the border to the United States.
However, those cross-border sales have largely ground to a halt since US President Donald Trump’s 50 percent tariff on $20 billion in Canadian goods, encompassing dairy products, took effect on August 22.
Pruim, who also serves as chair of the British Columbia Dairy Association representing approximately 400 provincial farmers, informed Al Jazeera that Canadian farmers do not independently determine which products are exported.
Instead, producers like Pruim—whose farm houses 330 cows milked three times daily—sell into the provincial milk-marketing system, which allocates milk to processors based on demand, including demand for US-bound exports.
If a processor loses US demand, it may require less milk, with the resulting impact distributed across the provincial pool.
Dylan Kruger, director of public affairs at BC Dairy, told Al Jazeera that “considerable uncertainty remains regarding the impact of the US tariffs.”
He noted it was premature to determine how the industry would be affected or whether milk no longer sold to the US could be redirected elsewhere to mitigate financial losses.
Nevertheless, the tariffs and broader trade tensions have already introduced instability for businesses.
![Casey Pruim, owner of Prime Acres Ltd. dairy farm in Abbotsford, British Columbia heads the BC Milk Producers Association in Canada's western province [Ali Mustafa/Al Jazeera]](data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///ywAAAAAAQABAAACAUwAOw==)
“If a processor exporting to the United States can no longer sell into that market because a 50 percent tariff prices them out, that is how it impacts the dairy farm,” Pruim stated.
Pruim warned that if processor demand is squeezed, farmers would be forced to discard the milk. In the worst-case scenario, the herd size must be reduced.
“Cows are not like a tap; you cannot simply turn them on or off,” he remarked.
His warning underscores dairy’s particular vulnerability in a trade war: Milk is highly perishable, collected on a strict schedule, and dependent on processors whose demand can shift far more rapidly than farmers can adjust production.
“These tariffs are completely unwarranted,” David Wiens, president of the Dairy Farmers of Canada, told Canada’s CBC News, adding that they would affect “the supply chain, not only in Canada but in the US as well.”
Supply-management system
Dairy trade between Canada and the US has largely operated under a free trade agreement between the US, Mexico, and Canada, known as CUSMA in Canada.
Canada manages the supply of dairy, poultry, and eggs through a national agricultural policy known as supply management. The system utilizes production quotas and import controls, including tariffs, to provide farmers with more stable and predictable prices while maintaining domestic supply.
Critics describe the system as protectionist and a government-backed cartel.
Washington argues that Canada’s supply-management system restricts US dairy exports. Trump posted on Truth Social that “Canada had been ripping off the United States of America for years” and accused it of imposing “ridiculously high tariffs” that made life impossible for US farmers.
Canadian producers reject this argument, stating that the existing trade agreement already grants US imports substantial tariff-free access that remains underutilized.
According to the Dairy Processors Association of Canada, Canada’s dairy trade deficit with the US has grown significantly since CUSMA came into force on July 1, 2020.
In 2020, Canada exported 241.3 million Canadian dollars ($173 million) in dairy products to the US and imported 647.4 million Canadian dollars ($462.7 million) worth of dairy and dairy products. By 2025, Canadian dairy exports had risen to 308.7 million Canadian dollars ($220.7 million), while dairy imports from the US had more than doubled to 1.355 billion Canadian dollars ($968.5 million), accounting for 13.8 percent of the total value of US dairy exports, according to the association.
Bryan Yu, chief economist at Central 1 credit union, said the immediate shock of losing a major market could be difficult for Canadian producers to absorb because replacement buyers cannot be found quickly.
“There is going to be pain in the near term for a lot of our producers,” Yu told Al Jazeera.
“You really cannot quickly adjust to a 50 percent tariff, because it is uncharted territory for many industries … and ultimately it shuts out Canadian producers, because many of them lack the margins to absorb the costs,” he said.
Yu noted that Canadian consumers might absorb some of the additional supply while exporters search for new markets and higher-value products, but neither adjustment is instantaneous.
“There are global markets as well, especially when you discuss chilled beef, chilled products, and really it is a question of whether other types of markets could be available.”
Canada has also imposed retaliatory tariffs, which took effect on September 8 and cover $20 billion worth of US products.
Dairy products are among the targeted goods. The list includes a 50 percent tariff on milk, cream, and whey products, and a 25 percent tariff on many cheeses imported from the US.
Canadian Prime Minister Mark Carney has framed Ottawa’s response as both retaliation and an effort to build greater economic resilience.
Announcing the collapse of the latest negotiations, he stated that Canada would match Washington’s new tariffs “dollar for dollar” to protect workers, farmers, families, and businesses.
But retaliatory measures carry their own risks.
“Canada’s new retaliatory tariffs will help some industries but hurt most and weaken economic growth across the country by raising costs for producers and consumers,” Oxford Economics said in a report.
For now, geography remains a critical factor for perishable goods like dairy products that once moved quickly across the US border and cannot be redirected overnight to a distant market without new buyers, logistics, and regulatory approvals.
Ottawa’s Trade Commissioner Service is advising affected companies to verify their CUSMA compliance, explore available relief, and contact trade commissioners about potential new markets.
Yu predicted that the US and Canada could reach a tariff deal in the coming months but warned that the interim period could bring “higher prices, weaker economic activity, and deeper mistrust.”
For Pruim, the uncertainty is as destabilizing as the tariff threat itself.
“I think, like any Canadian, it is disappointing to have these trade talks collapse again and just the uncertainty surrounding it.”