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UPDATE 1-U.S. asks Canada to end 'underhanded' dairy pricing class

(Adds agriculture secretary's comments)

June 5 (Reuters) - The United States has asked Canada to eliminate a new "underhanded" dairy-pricing class that has undercut sales by U.S. dairies to Canadian processors, U.S. Agriculture Secretary Sonny Perdue said on Monday.

Perdue was speaking to reporters after he met with Canadian Agriculture Minister Lawrence MacAulay in Toronto.

Canada's dairy farmers last year struck a new pricing deal, known as Class 7, with processors including Saputo Inc and Parmalat Canada. Foreign industry groups said the deal priced domestic milk ingredients used to make cheese and yogurt below cost.

"I made it very clear that the Class 7 designation we felt was unfair, undercutting this (U.S.) industry that grew up south of the border," Perdue said. .".. The quick win would be to do away with Class 7 milk, which we think is a very unfair, underhanded circumvention of WTO (World Trade Organization)."

Perdue's comments come as the United States has signaled it wants to renegotiate the North American Free Trade Agreement (NAFTA) with Canada and Mexico. (Editing by James Dalgleish)