When it comes to global dairy trade, ensuring fair competition and market access for U.S. dairy producers remains a significant challenge. This complexity was brought to light during a recent testimony before the U.S. International Trade Commission (USITC) by Jaime Castaneda, executive vice president for policy development and strategy for U.S. Dairy Export Council (USDEC) and National Milk Producers Federation (NMPF), and Will Loux, senior vice president for global economic affairs. Their discussions highlighted the pressing need for the U.S. government to address international policies that disrupt markets and harm American dairy interests.
The Core of the Challenge: Trade-Distorting Policies
Throughout the USITC hearing, Castaneda and Loux emphasized the role of trade-distorting policies and subsidies from countries such as Canada, India, Turkey and the European Union. These policies contribute to a global market environment where artificially low-priced exports undermine the competitive position of U.S. producers. A significant portion of their testimony was dedicated to addressing Canadian dairy policies, which have been identified as a major factor affecting fair competition.
Why Canada is a Focus
“The U.S. is an extremely competitive player in world dairy markets,” Castaneda says. “However, Canada’s actions are one of the major policy factors undermining fair competition in those markets. We encourage this investigation to include a focus on the full breadth of trade-distorting policies that Canada and other major suppliers employ that can undercut U.S. producers and exporters. It is critical that the United States takes to curb these anticompetitive practices during the 2026 USMCA review process.”
The Importance of the USITC Investigation
The USITC hearing is part of an ongoing investigation into the global nonfat milk solids market, initiated at the request of the U.S. Trade Representative. This inquiry aims to analyze the government policies affecting production and exports, with a keen eye on those maintained by Canada and other major dairy suppliers. Both the NMPF and USDEC have advocated for such investigations to curb Canada’s continued attempts to bypass its trade commitments. USTR’s initiation of this investigation was a key step in that direction.
The Broader Impact of Unfair Trade Practices
During his remarks, Loux provided statistics illustrating the scale of the issue. For example, Canada’s exports of protein concentrates and isolates have significantly increased since the implementation of USMCA, while India’s subsidized SMP exports reached substantial levels, outcompeting global prices. Similarly, Turkey’s relentless increase in whey exports further complicates the competitive landscape for U.S. dairy producers in crucial markets like Southeast Asia and China.
“Canada’s exports of protein concentrates and isolates have more than doubled since the implementation of USMCA,” Loux said in his remarks. “India’s subsidized SMP exports were as high as 45,000 metric tons in 2021 and were sold at a 10% discount compared to the global average. Turkey’s whey exports, which have quadrupled in the last two years by selling at roughly half the global average, are increasingly moving beyond the Middle East and into critical export markets for U.S. manufacturers, including Southeast Asia and China. It is essential that the United States push back against dishonest trade practices and ensure that U.S. dairy producers can compete on a level playing field around the world.”
Charting the Path Forward
As the USITC is scheduled to submit its report by March 2026, USDEC and NMPF are dedicated to leveraging the upcoming USMCA Review process. Their goal is to ensure U.S. dairy producers not only gain promised market access but also fully benefit from international trade agreements. By addressing these trade challenges head-on, the aim is to foster an environment where U.S. dairy producers can thrive on a global stage.
This commitment reflects a broader strategy to protect and promote the interests of U.S. dairy within the global market, ensuring fair play and reinforcing America’s competitive edge in dairy trade dynamics.
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