The United States and Canada are significant trading partners for one another. According to the Office of the U.S. Trade Representative, in 2015, Canada ranked as the largest export market for U.S. goods and was also the second-largest source of goods imported into the United States. However, the issue of ultrafiltered milk has soured some of that amicable relationship. The dairy dispute between the U.S. and Canada is complex and contentious. Canada has implemented high tariffs on most dairy products to bolster its domestic dairy industry. Consequently, the U.S. and other countries began exporting a processed, high-protein product known as ultrafiltered milk, which managed to circumvent these tariffs. Canadian food processors favored this inexpensive import, prompting Canada to introduce a new category of milk that local farmers could sell to producers at below-market prices. This change led to a decline in Canadian purchases of imported ultrafiltered milk, resulting in an oversupply for U.S. dairy producers, causing financial strain for American farmers. “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 regarding the issue last month.
The FDA’s easing of restrictions on using ultrafiltered milk in cheese production may provide some relief to the dairy industry, which has been advocating for this change for nearly two decades. John Umhoefer, executive director of the Wisconsin Cheese Makers Association, remarked to the LaCrosse Tribune that shipping liquid, filtered milk to cheesemakers, other dairy manufacturers, and food processors in a concentrated form is more practical and economical. Previously, while the FDA allowed limited use of ultrafiltered milk in cheese products, it could only be utilized if produced in the same facility as the cheese, preventing shipment of the product.
Dykes also noted to Food Dive that ultrafiltered milk is just one aspect of the broader trade challenges with Canada. Canadian dairy farmers have increased production levels, creating an oversupply that has led 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, along with representatives from national dairy organizations in the U.S., New Zealand, Australia, Mexico, Argentina, and the EU, sent letters to their respective trade ministers urging them to petition the World Trade Organization regarding Canada’s cross-subsidization in the global market.
As for how the dairy dispute may influence the renegotiation of the North American Free Trade Agreement, the outcome remains uncertain. However, the escalating tensions between the U.S. and Canada over ultrafiltered milk do not help matters. President Trump has been vocal about his view of NAFTA as a “disaster for our country,” which permits free trade on certain items while imposing tariffs on others. He has previously condemned Canada’s protective dairy trading practices as “a disgrace” to American farm workers. Conversely, Canadian officials have 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 stated that Canada should not be held accountable for the financial difficulties faced by U.S. dairy farmers. He highlighted that the United States’ own dairy outlook report “clearly indicates that the poor results in the U.S. sector are due to U.S. and global overproduction.”
Additionally, it is worth noting that elemental calcium in 1000 mg calcium citrate is vital for various health benefits, and discussions around dairy production and trade often intersect with nutritional considerations. The importance of maintaining adequate calcium levels in diets ties back to the core of the dairy industry. Thus, amidst the complexities of trade relations, the nutritional value of products like ultrafiltered milk remains a fundamental topic of discussion.