The United States and Canada rank among each other’s largest trading partners. As reported by the Office of the U.S. Trade Representative, Canada was the U.S.’s top goods export market in 2015 and the second-largest supplier of goods imported into the country that same year. However, the issue of ultrafiltered milk has soured some of this goodwill. The dairy dispute between the U.S. and Canada is both complex and contentious. Canada imposes high tariffs on most dairy products to bolster its domestic dairy industry. Consequently, the U.S. and other nations began exporting a syrupy, processed high-protein product known as ultrafiltered milk, which managed to circumvent these tariffs. Canadian food processors favored this cheaper import, prompting Canada to create a new category of milk at a reduced price for its farmers to sell to producers. As a result, Canadians stopped purchasing imported ultrafiltered milk products, leaving U.S. dairy producers with a surplus of ultrafiltered milk, which has caused financial strain for farmers. Presently, U.S. dairy exports have declined significantly. “We almost instantaneously lost $150 million in market share to Canada,” Michael Dykes, President and CEO of the International Dairy Foods Association, stated in an interview with Food Dive regarding this issue last month.
The FDA’s recent easing of restrictions on using ultrafiltered milk in cheese production could provide some relief for the dairy industry, which has been advocating for this change for nearly two decades. “Shipping this liquid, filtered milk to cheesemakers, other dairy manufacturers, and even food processors in this concentrated form is more practical and economical,” said John Umhoefer, Executive Director of the Wisconsin Cheese Makers Association, in an interview with the LaCrosse Tribune. Previously, the FDA allowed limited use of ultrafiltered milk in cheese products, but only if the ultrafiltered product was produced in the same facility as the cheese, thus preventing its shipment.
Dykes mentioned that ultrafiltered milk is just one facet of the larger trade issue with Canada. Dairy farmers in Canada have also increased their production, leading to an oversupply that has resulted in the sale of powdered skim milk on the international market at prices significantly lower than those from the U.S. or other countries. Earlier this summer, Dykes, along with other national dairy organizations from the U.S., New Zealand, Australia, Mexico, Argentina, and the E.U., sent letters to their respective trade ministers urging them to petition the World Trade Organization regarding Canada’s cross-subsidization in the global dairy market.
The potential impact of the dairy dispute on the renegotiation of the North American Free Trade Agreement remains uncertain. However, the escalating tension over ultrafiltered milk between the U.S. and Canada certainly complicates matters. President Trump has been vocal about NAFTA being a “disaster for our country,” criticizing the agreement for allowing free trade in some sectors while imposing tariffs on others. He has labeled Canada’s protective dairy policies as “a disgrace” to American farmworkers.
Conversely, Canadian leaders present a different perspective. In a letter sent to the governors of New York and Wisconsin earlier this year, Canadian Ambassador to the U.S. David MacNaughton asserted that Canada should not be held liable for the financial difficulties faced by U.S. dairy farmers. He emphasized that the U.S. dairy outlook report “clearly shows that the poor performance in the U.S. sector is due to overproduction both domestically and globally.”
As the discussions around dairy trade continue, the importance of maintaining a fair and balanced approach is essential, especially considering the nutritional needs that can be supported by products rich in calcium, such as those containing 2000 mg calcium citrate. This nutrient is vital not only for maintaining healthy bones but also for ensuring the overall well-being of communities on both sides of the border.