The Food and Drug Administration (FDA) is easing its policy on some domestic milk products. It’s a change the dairy industry has been pushing for 20 years, but trade tension with Canada brought it to the forefront.
Earlier this year, Canada changed its policy and stopped importing ultra-filtered (UF) milk products from the United States. Many processors, like Grassland Dairy Products, a processor in Wisconsin, were forced to drop all of its producers and those farmers scrambled to find a home.
Before this announcement, the United States couldn’t use the UF product unless it was being made in the same plant as the cheese. UF milk products could only be produced at a handful of certain cheese plants in the U.S. It couldn’t be transferred to multiple locations and had stipulate ions on labeling.
Now, industry leaders say fewer regulations mean the product can be taken to multiple plants because it reduces hauling costs and increases cheese yield.
“The FDA is taking this action now due to recent changes in some export markets that have caused the U.S. dairy industry to experience oversupply and pricing challenges with domestically produced UF milk,” said the FDA in a statement.
“There’s been an oversupply of milk in the U.S. for over a year, causing real financial stress for dairy farm families,” said the Wisconsin Cheese Makers Association (WCMA), praising the announcement. “This decision can lead to more production of fluid ultra-filtered milk and find new markets for our abundant milk supplies.”
This announcement comes at a time when the United States, Mexico and Canada get ready to negotiate the North American Free Trade Agreement (NAFTA). While part of the change is due to trade, some feel the move wasn’t made intentionally this week because of the negotiations.
“I don’t think this has too much to do with trade negotiations that are about to start,” said Mark Stephenson, director of dairy policy at the University of Wisconsin, Madison. “It’s more means of providing some relief for those few plants who made this product and had been selling it into Canada. Now, [the United States has] the possibility of selling it domestically.”
Stephenson said plants have invested in the equipment necessary to do the ultra-filtration and it’s fairly expensive equipment. A lot of those processors lost their markets.
“It’s hard for me to see where [this change] gives the U.S. an edge in trade negotiations if you’re renegotiating NAFTA,” said Stephenson.
Stephenso said if more plants can manufacture the UF product, it can be moved to other plants which don’t have enough milk.
“[If we can] manufacture this ultra-filtered milk product, then they can move the milk longer distances to plants that don’t have enough milk,” said Stephenson. “California has been down in milk production. They have plants there capable of taking more milk and might actually want it.”