(Recasts with comments on Trans-Pacific trade deal)
By Rod Nickel
Nov 5 (Reuters) - Canadian farmers will get squeezed between
new trade deals that allow more dairy imports to enter the
country and slow-growing domestic consumption, the chief
executive of Saputo Inc SAP.TO said on Thursday.
The Trans-Pacific Partnership trade deal is expected to open
access for New Zealand, the United States and other countries to
3.5 percent of the Canadian market, said Chief Executive Lino
Saputo Jr. of Saputo, one of Canada's largest dairies.
That will be on top of roughly equal new access negotiated
by the European Union, Saputo said on a conference call.
"Somewhere along the line, there's going to be less milk
produced in Canada," Lino Saputo Jr. said. "So it's going to be
a hit to dairy farmers."
Canada's dairy industry operates under a system of supply,
price and import controls.
The former Canadian government, which negotiated the deal
which seeks to cut tariffs and taxes on commerce in 40 percent
of the world's economy, has estimated new TPP dairy market
access would amount to 3.25 percent.
The actual market access Canada gives up under TPP depends
on butterfat content in imported products, said Isabelle
Bouchard, spokeswoman for Dairy Farmers of Canada (DFC) lobby
group. DFC estimates market access will actually range between
3.4 and 4 percent, she said.
Canada's previous Conservative government, defeated last
month in an election, promised C$4.3 billion in compensation for
farmers.
The new Liberal government, which won a majority of seats in
Parliament, has not yet said if it will support TPP, but
Bouchard said DFC has heard from Liberal legislators who support
the compensation.
Lino Saputo said his company, which also has operations in
TPP countries Australia and the United States, will find ways to
make the deal work for it, even though the government "kept
(Saputo) in the dark" during negotiations.
The company said on Thursday its second-quarter earnings
were down from the same period a year earlier on lower prices
for cheese and butter.
The Montreal-based company's brands include Dairyland milk
and Armstrong cheese.
For its fiscal second quarter, net income fell to C$148.6
million, or 37 Canadian cents a share, from C$155.7 million, or
39 Canadian cents, a year earlier. Adjusted for one-time items,
earnings were 38 cents per share.
Revenue during the quarter, which ended Sept. 30, rose 3
percent to C$2.79 billion.
Analysts were expecting Saputo to earn 37 Canadian cents per
share on revenue of C$2.74 billion, according to Thomson Reuters
I/B/E/S.
Saputo's shares rose 0.5 percent to C$31.87 in Toronto.
(By Rod Nickel in Winnipeg, Manitoba; Editing by Alan Crosby)