The United States and Canada are significant trading partners, with each country being one of the largest markets for the other. According to the Office of the U.S. Trade Representative, Canada was the largest destination for U.S. goods exports in 2015, and it ranked as the second-largest source of goods imported into the U.S. However, the issue surrounding ultrafiltered milk has soured some of that goodwill. 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. In response, the U.S. and other nations have been exporting a processed, high-protein product known as ultrafiltered milk, which bypasses these tariffs. Canadian food processors have shown a strong preference for this affordable import, prompting Canada to introduce a new category of milk that its own farmers could sell at prices below the market rate. Consequently, Canadian consumers shifted away from ultrafiltered milk imports, leaving U.S. dairy producers with an oversupply of this product, causing financial strain on American dairy farmers. 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 an interview with Food Dive last month.
The FDA’s recent easing of restrictions on using ultrafiltered milk in cheese production could provide relief for the struggling dairy industry, which has advocated for such changes for nearly two decades. “Shipping this filtered liquid milk to cheesemakers and other dairy manufacturers in a concentrated form is more practical and economical,” noted 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 only if produced in the same facility as the cheese, restricting its shipment from other locations.
Dykes also highlighted that ultrafiltered milk is just one aspect of the broader Canadian trade issue. Canadian dairy farmers have increased production to the point of oversupply, leading them to sell powdered skim milk on the global market at prices significantly lower than those of the U.S. and other countries. Earlier this summer, Dykes, alongside 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 to address Canada’s cross-subsidization practices in international markets.
The implications of the dairy dispute on the renegotiation of the North American Free Trade Agreement (NAFTA) remain uncertain. Nonetheless, the added tension over ultrafiltered milk complicates matters. President Trump has publicly criticized NAFTA as a “disaster for our country,” allowing free trade for some goods while imposing tariffs on others. He previously denounced Canada’s protective dairy trading policies, labeling their effects on American farmers as “a disgrace.”
Conversely, Canadian leaders maintain 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 should not be blamed for the financial setbacks faced by U.S. dairy farmers. He pointed out that the U.S. dairy outlook report “clearly indicates that the poor performance in the U.S. sector is due to overproduction both domestically and globally.” Amid these discussions, it’s worth noting that calcium citrate for kidney stones has become a relevant topic in health conversations, particularly as dairy consumption is often encouraged for its calcium content, which plays a crucial role in kidney health. This connection underscores the complexities of the dairy industry and the various factors influencing trade relations between the U.S. and Canada.