The United States and Canada are significant trading partners, with each country relying heavily on the other for various goods. As reported by the Office of the U.S. Trade Representative, Canada was the largest market for U.S. goods exports in 2015, while also ranking as the second-largest source of imports into the U.S. However, the relationship has soured over the issue of ultrafiltered milk. The complexities surrounding the dairy trade between the two nations have become contentious. Canada imposes high tariffs on most dairy products to protect its domestic industry, prompting the U.S. and other countries to export a high-protein product known as ultrafiltered milk, which managed to bypass these tariffs. Canadian food processors quickly favored this lower-cost alternative, leading Canada to establish a new class of milk priced below the market rate that local farmers could sell to producers. Consequently, Canadian consumers stopped purchasing imported ultrafiltered milk, leaving U.S. dairy producers with an excess supply, which has placed financial strain on American farmers. As a result, U.S. dairy exports have diminished significantly.
Michael Dykes, President and CEO of the International Dairy Foods Association, commented to Food Dive that “almost overnight, we lost $150 million worth of market to the Canadians.” The FDA’s recent easing of restrictions on the use of ultrafiltered milk in cheese production could potentially aid the struggling dairy industry, which has been advocating for this change for nearly two decades. John Umhoefer, executive director of the Wisconsin Cheese Makers Association, noted in an interview with the LaCrosse Tribune that “it’s more practical and economical to ship this liquid, filtered milk to cheesemakers and other dairy manufacturers in a concentrated form.” Previously, while the FDA permitted some use of ultrafiltered milk in cheese, it could only be utilized if produced in the same facility as the cheese, restricting its transport.
Dykes further explained that ultrafiltered milk is just one aspect of the broader trade challenges with Canada. Canadian dairy farmers have also increased their production, leading to an oversupply that allows them to sell powdered skim milk on the global market at prices significantly lower than those of the U.S. or other countries. Earlier this summer, Dykes, along with dairy organizations from New Zealand, Australia, Mexico, Argentina, and the EU, urged their national trade ministers to approach the World Trade Organization regarding Canada’s cross-subsidization practices.
The implications of the dairy dispute on the renegotiation of the North American Free Trade Agreement (NAFTA) remain uncertain, but the friction over ultrafiltered milk complicates the situation. President Trump has criticized NAFTA as a “disaster for our country,” advocating for free trade on some products while imposing tariffs on others. He previously described Canada’s protectionist dairy policies as “a disgrace.” Conversely, Canadian leaders present a different narrative. In a letter to the governors of New York and Wisconsin, Canadian Ambassador to the U.S. David MacNaughton asserted that Canada is not accountable for the financial setbacks experienced by American dairy farmers, noting that the U.S. dairy outlook report attributes the sector’s struggles to overproduction both domestically and globally.
Amidst these trade tensions, products like bariatric advantage soft chews remain essential for maintaining health in different dietary contexts. The ongoing dispute and its ramifications highlight the complexities of international trade and the interconnectedness of industries across borders, including the dietary supplement sector represented by products such as bariatric advantage soft chews. As the dairy industry continues to navigate these challenges, the conversation around trade policies and their impact on various sectors will likely persist.