Trade is essential to the success of the U.S. dairy industry. Supporting more than 3 million jobs and contributing $779 billion to the U.S. economy, dairy depends on access to global markets to sustain growth and create new opportunities for farmers, processors, and communities nationwide. In the span of a decade, that access has helped transform the United States from a net importer of dairy products into a global dairy powerhouse, exporting $9.5 billion in dairy products to 143 countries in 2025. Today, more than 18% of all U.S.-produced milk is sold overseas, highlighting the critical role exports play in the industry’s future.
As U.S. milk production is expected to continue growing while production in competing dairy-exporting nations declines, strong trade relationships will become increasingly important. Few agreements are as consequential to the U.S. dairy industry as the United States-Mexico-Canada Agreement (USMCA). USMCA governs trade with two of America’s closest neighbors and most important dairy partners.
We connected with Becky Rasdall Vargas, IDFA senior vice president of trade and workforce policy, to dive into dairy’s most important trade agreement.
What exactly is the United States-Mexico-Canada Agreement (USMCA)?
The United States-Mexico-Canada Agreement is called the USMCA. It is the replacement agreement for the North America Free Trade Agreement. NAFTA was negotiated in the 1990s. It was in place for several decades. And just like anything, it was in need of an update and a refresh.
NAFTA was negotiated in the 1990s. It was in place for several decades. And just like anything, it was in need of an update and a refresh.
Becky Rasdall Vargas, senior vice president of trade and workforce policy
In 2018-2019, the United States, Mexico and Canada got together and decided to renegotiate NAFTA.
Why is USMCA important to dairy and IDFA members?
USMCA is the most important agreement dairy has. Mexico and Canada are our number one and number two trading partners. And together they make up about 44% of US dairy exports worldwide as of 2024.
USMCA is the most important agreement dairy has. Mexico and Canada are our number one and number two trading partners.
Becky Rasdall Vargas, senior vice president of trade and workforce policy
A trade agreement by its nature is going to integrate supply chains. And that has been the case with our closest neighbors to the north and to the south.
Whether you ship products to Canada and Mexico or not, the fact of the matter is that across the supply chain, there are people whose business relies on that preferential access to Canada and Mexico. USMCA is important to everybody, whether you export or not.
How has IDFA been engaged with USMCA negotiations?
IDFA has been engaged with USMCA from the beginning. I joined IDFA right around the time of its entry into force, coming from the U.S. government, where I was a negotiator for the agreement. Jumping straight into this role, we were able to engage right away by advising USTR on how it was working, or not working for dairy, and by providing insights from stakeholders across the supply chain.
We have been able to engage right away by advising USTR on how it was working or not working for dairy, and by providing insights from stakeholders across the supply chain.
Becky Rasdall Vargas, senior vice president of trade and workforce policy
What’s at stake if a full agreement isn’t reached?
With 44% of our global exports tied up in just these two markets, we have too much riding on this agreement to leave it in a state of limbo. The agreement right now is in a year-over-year review process, and that can continue for a maximum of ten years. We need to stabilize that and have a modernized agreement that can be fully renewed and remain in place.
With 44% of our global exports tied up in just these two markets, we have too much riding on this agreement to leave it in a state of limbo.
Becky Rasdall Vargas, senior vice president of trade and workforce policy
How can IDFA members get involved?
Becky Rasdall Vargas: Consider us your voice in Washington. In the same way that U.S. negotiators don’t know what we don’t tell them, we don’t know what you don’t tell us. Companies might not want to reach out because they don’t know if their issue is really that big of a problem or rises to the level of reaching out. It does. We need to hear from you in order to be able to effectively advocate on your behalf.
Reach out to us at [email protected] with any inquiries or for more information on ongoing trade issues.