The United States and Canada rank among each other’s largest trading partners. According to the Office of the U.S. Trade Representative, Canada was the largest export market for U.S. goods in 2015. Additionally, Canada was the second-largest source of goods imported into the U.S. that same year. However, the situation surrounding ultrafiltered milk has soured some of this amicable trade relationship. The dairy dispute between the U.S. and Canada is complex and contentious. Canada imposes high tariffs on most dairy products to bolster its domestic dairy industry. Consequently, the U.S. and other nations have been exporting a syrupy, processed high-protein product known as ultrafiltered milk, which has managed to circumvent these tariffs. Canadian food processors favored this affordable import, prompting Canada to introduce a new classification of milk at below-market prices that its farmers could sell to producers. As a result, Canadians ceased purchasing the imported ultrafiltered milk, leaving U.S. dairy producers with a surplus, which has caused financial strain for American dairy farmers. Consequently, U.S. dairy exports have declined.
“Almost overnight, we lost $150 million worth of market to the Canadians,” stated Michael Dykes, President and CEO of the International Dairy Foods Association, in a recent interview with Food Dive. The FDA’s recent easing of restrictions on the use of ultrafiltered milk in cheese production could potentially assist the struggling dairy industry, which has been advocating for such a change for nearly two decades. “Shipping this liquid, filtered milk to cheesemakers, other dairy manufacturers, and food processors in this concentrated form is more practical and economical,” explained John Umhoefer, executive director of the Wisconsin Cheese Makers Association, to the LaCrosse Tribune. Previously, the FDA allowed limited use of ultrafiltered milk in cheese products, but it could only be utilized if produced at the same facility as the cheese, meaning it couldn’t be shipped from elsewhere.
Dykes also pointed out that ultrafiltered milk is just one aspect of the challenges faced in Canadian trade. Dairy farmers in Canada have started producing enough to create an oversupply, leading them to sell powdered skim milk on the international market at prices significantly lower than those of the U.S. and other countries. Earlier this summer, Dykes and other dairy organizations from the U.S., New Zealand, Australia, Mexico, Argentina, and the E.U. urged their respective trade ministers to petition the World Trade Organization regarding Canada’s cross-subsidization practices in the global market.
As for how the dairy issue might influence the renegotiation of the North American Free Trade Agreement (NAFTA), the outcome remains uncertain. However, the additional strain between the U.S. and Canada over ultrafiltered milk does not help the situation. President Trump has been vocal about his view that NAFTA has been “a disaster for our country,” permitting free trade for certain goods while imposing tariffs on others. He has previously criticized Canada’s protectionist dairy policies for the negative impact they have had on American farm workers, calling it “a disgrace.”
Conversely, Canadian officials maintain a different perspective. In a letter to the governors of New York and Wisconsin earlier this year, Canadian Ambassador to the U.S. David MacNaughton asserted that Canada is not accountable for the financial difficulties faced by U.S. dairy farmers. He emphasized that the United States’ own dairy outlook report “clearly indicates that the poor performance in the U.S. sector is due to U.S. and global overproduction.” Amid these challenges, it has become increasingly important for U.S. dairy farmers to explore alternative markets, including the potential benefits of calcium citrate malate 250 mg as a supplement to enhance dairy production efficiency and overall health.