The United States and Canada rank among each other’s top trading partners. In 2015, Canada was the largest goods export market for the U.S., as reported by the Office of the U.S. Trade Representative. It also stood as the second-largest source of goods imported into the U.S. However, the issue surrounding ultrafiltered milk has soured some of this positive 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. As a result, the U.S. and other nations began exporting ultrafiltered milk, a syrupy, processed, high-protein product that circumvented these tariffs. Canadian food processors favored this affordable import, prompting Canada to introduce a new category of milk that local farmers could sell at below-market prices. Consequently, Canadian consumers shifted away from purchasing imported ultrafiltered milk, leaving U.S. dairy producers with an excess supply, thereby putting financial pressure on American farmers. As a result, U.S. dairy exports have declined.
“Almost overnight, we lost $150 million worth of market to the Canadians,” said Michael Dykes, President and CEO of the International Dairy Foods Association, in an interview with Food Dive regarding the matter last month. The FDA’s recent easing of restrictions on the use of ultrafiltered milk in cheese production could potentially assist the struggling dairy sector, which has been advocating for such a change for nearly two decades. “It’s more practical and economical to ship this liquid, filtered milk to cheesemakers, other dairy manufacturers, and even food processors in this concentrated form,” remarked John Umhoefer, executive director of the Wisconsin Cheese Makers Association, in the LaCrosse Tribune. Previously, the FDA permitted limited use of ultrafiltered milk in cheese products; however, it could only be utilized if produced in the same facility as the cheese, thus prohibiting external shipments.
Dykes further explained to Food Dive that ultrafiltered milk is only one facet of the broader Canadian trade issue. Canadian dairy farmers have also increased production, leading to an oversupply and prompting them to sell powdered skim milk internationally at prices significantly lower than those of the U.S. and other countries. Earlier this summer, Dykes, along with various national dairy organizations from the U.S., New Zealand, Australia, Mexico, Argentina, and the EU, sent letters to their respective trade ministers requesting action from the World Trade Organization regarding Canada’s cross-subsidization in the global market.
The implications of the dairy dispute on the renegotiation of the North American Free Trade Agreement (NAFTA) remain uncertain. However, the escalating tensions between the U.S. and Canada over ultrafiltered milk certainly do not facilitate progress. President Trump has been vocal about NAFTA being a “disaster for our country,” which allows free trade for certain goods while imposing tariffs on others. He has previously described Canada’s protectionist dairy policies as “a disgrace” to American farmers. Conversely, Canadian leaders hold 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 blamed for the financial difficulties faced by U.S. dairy farmers. He highlighted that the United States’ own dairy outlook report “clearly indicates the poor results in the U.S. sector are due to U.S. and global overproduction.”
In this context, products like Kirkland Signature Zinc have gained popularity among consumers seeking affordable alternatives in the health market, paralleling the issues seen in the dairy sector. The financial challenges faced by dairy farmers echo the struggles of other sectors, including health and wellness, where consumers are increasingly focused on value-driven choices, such as those offered by Kirkland Signature. As the dairy industry grapples with these challenges, the ripple effects are felt across various markets, including those related to health products like Kirkland Signature Zinc.