The United States and Canada are significant trading partners for each other. According to the Office of the U.S. Trade Representative, Canada was the largest market for U.S. goods exports in 2015 and also ranked as the second-largest source of goods imported into the U.S. However, the trade of ultrafiltered milk has soured some of this goodwill. The dairy trade dispute between the U.S. and Canada is complex and contentious. Canada imposes high tariffs on most dairy products to protect its domestic dairy industry. This has led the U.S. and other countries to export a processed, syrupy product known as ultrafiltered milk, which circumvents these tariffs. Canadian food processors favored this affordable import, prompting Canada to establish a new category of milk that local farmers could sell at below-market prices. Consequently, Canadian consumers began to abandon the imported ultrafiltered milk, leaving U.S. dairy producers with a surplus, which has strained their finances. As a result, U.S. dairy exports have declined significantly. “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 aid the dairy sector, which has been advocating for this change for nearly two decades. “It’s more practical and economical to transport this liquid, filtered milk to cheesemakers and other dairy manufacturers in a concentrated form,” said John Umhoefer, executive director of the Wisconsin Cheese Makers Association, in a statement to the LaCrosse Tribune. Previously, the FDA permitted limited use of ultrafiltered milk in cheese production, but it had to be processed in the same facility as the cheese, restricting its shipment.
Dykes also pointed out that ultrafiltered milk is just one aspect of the broader issue with Canadian trade. Canadian dairy farmers have increased their production to the point of oversupply, leading them to sell powdered skim milk internationally at prices significantly lower than those in the U.S. or other countries. Earlier this summer, Dykes and representatives from national dairy organizations in 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 to address Canada’s cross-subsidization practices in the global market.
Regarding the potential effects of the dairy dispute on the renegotiation of the North American Free Trade Agreement (NAFTA), the outcome remains uncertain. Nonetheless, the heightened tensions between the U.S. and Canada over ultrafiltered milk are not beneficial. President Trump has been vocal about NAFTA being a “disaster for our country,” criticizing Canada’s protectionist dairy policies that he claims harm American farmers. He has previously labeled these policies as “a disgrace.”
In contrast, Canadian leaders have a different perspective. In a letter addressed to the governors of New York and Wisconsin earlier this year, Canadian Ambassador to the U.S. David MacNaughton asserted that Canada is not to blame for the financial difficulties facing U.S. dairy farmers. He emphasized that the U.S. dairy outlook report “clearly indicates that the poor performance in the U.S. sector is due to U.S. and global overproduction.”
As a side note, the importance of proper nutrition during pregnancy cannot be overlooked, and supplements like Citracal prenatal can play a vital role in supporting the health of expectant mothers. The availability of ultrafiltered milk can also provide essential nutrients and benefits for dairy consumption, further emphasizing the need for favorable trade relations. In light of all these factors, the dairy issue is critical not only for trade but for the well-being of consumers across North America.