Canadian negotiators have rejected a U.S. proposal in the NAFTA talks that would dismantle Canada’s dairy supply management program. Some dairy groups and producers in the U.S. say that system unfairly benefits Canadian producers at the expense of the U.S. South Dakota Dairy Producers Association Executive Director Roger Scheibe says his group isn’t taking issue with Canada’s quota system, but instead their Class 7 pricing scheme.

There is growing concern the dairy dispute could derail the NAFTA talks. Scheibe says a compromise needs to be reached on the issue.

Scheibe says it’s imperative negotiators work out a deal with the NAFTA modernization, so the U.S. doesn’t lose market share in Mexico.

The fourth round of the NAFTA discussions just wrapped up where the dairy issue was raised.