Ultrafiltered Milk Sparks a U.S.-Canada Trade Battle
The dispute over the protein product, used primarily for making cheese, could have ripple effects in global dairy markets
U.S. dairy farmers and processors in Wisconsin, New York and Minnesota have been hurt by a newly adopted Canadian pricing policy that encourages Canadian dairies to buy certain types of milk products domestically. The specific product in the trade dispute is a milk-protein concentrate called ultrafiltered milk that is used primarily in cheese-making to increase yields.
In 2016, the U.S. exported $102 million in ultrafiltered milk to Canada, according to the U.S. Agriculture Department. But industry observers estimate that exports have dropped to near zero since February, when Canada created a nationwide dairy classification that lowered the price of Canadian milk used to make ultrafiltered milk.
.. “If you take Nafta away, all of a sudden it gets more expensive to sell U.S. agriculture products,”.. Nafta has been very good for U.S. farmers, Mr. Newton says, and pulling out could have all kinds of negative effects, such as Mexico shifting corn purchases from the U.S. to South America, or losing an important market for rice... Because Canada has relatively strict dairy policies and a supply-management system that controls the amount of milk that reaches market, experts say U.S. milk tends to be cheaper than Canadian milk... the demand from Canadian cheesemakers for U.S. milk proteins like ultrafiltered milk, a relatively new milk protein that was developed well after Nafta was put in place.There are no explicit terms in the treaty for dealing with ultrafiltered milk, since it doesn’t fit into any of the dairy chapters that existed when Nafta was signed... “We have been producing more and more milk in the upper Midwest, and we’ve reached a point where other processors are full to the gills,”.. “For the industry, there is not going to be much of an impact,” Mr. Gould says. “But for individual farmers, it will be devastating.”