Trade talks - that is tells a story.
Trade data reveals what appears to be a dirty secret. While there is all kinds of talk about reduced imports, the reduction per unit is not that great, especially when compared with U.S. dairy farm milk price.
The Harmonized Tariff Schedule (HTS) which defines all imports has several gradations. The most precise definition is ten digits HTS 04, the two digit number for dairy can be searched at the U.S. International Trade Commission database for several aspects. One interesting aspect identifies how much each unit costs.
Although there is talk about world dairy price collapse, the HTS 04 imports only dropped 8.80%, year-to-date through October 2009 compared with YTD 2008.
To put that in perspective, the “All Milk” price at U.S. dairy farms dropped 35%.
In essence, this is about imbalance of power.