Trade

The Importance of Trade for U.S. Dairy

The U.S. dairy industry, which supports more than 3 million jobs in the United States and pumps $779 billion into the U.S. economy, relies on trade agreements to open new markets and increase exports. After being a net importer of dairy products a decade ago, the United States exported $8.2 billion in dairy products in 2024 to 133 countries.  U.S. dairy exports have more than quadrupled since the early 2000s, and today, approximately one day’s worth of milk produced each week is exported, or a little over 18% of all production. As U.S. milk production is expected to continue increasing over the next decade while other dairy-producing competitors see decreasing production, new trade agreements will become even more vital to ensure the global competitiveness of the U.S. industry and to boost the American economy.

Our Position

IDFA advocates for the protection of existing trade agreements and the development of new, tariff-reducing trade agreements in order to ensure U.S. dairy products are globally competitive. At the same time, IDFA’s members represent a globalized dairy supply chain that also relies on imported inputs, equipment, packaging, and specialty goods.

IDFA recognizes the U.S. dairy industry’s needs for equitable and transparent agreements that provide certainty, create preferential access, open markets and eliminate barriers. IDFA also recognizes the need for market certainty, supply chain resilience, and strong relationships with trading partners.  IDFA advocates for all of these things by collaborating with the Administration to elevate U.S. dairy priorities in all trade negotiations, by providing innovative feedback on dairy trade policy priorities, and by emphasizing the industry and economic importance of these agreements to both the Administration and Congress.

Trade could not be a higher priority for our industry, and now more than ever, the United States is poised to be one of the world’s largest suppliers of sustainable dairy products – if we can have policies that support the products getting exported.  IDFA’s work with policymakers is leading the way into that future, and we could not be more excited about seeing that future materialize.

MICHAEL DYKES, D.V.M., PRESIDENT & CEO OF THE INTERNATIONAL DAIRY FOODS ASSOCIATION (IDFA)

Deeper Dive

Whether short, medium, or long-term, IDFA works regularly with members to develop a proactive, strategic approach to the following U.S. dairy trade policy priorities:

Reduce Non-Tariff Barriers and Technical Barriers to Trade

Unnecessarily burdensome facility registration and certification measures have proliferated U.S. dairy export markets for too long.  IDFA combats these measures globally by developing innovative trade commitments, seeking opportunities to simplify rules where possible, and elevating concerns within relevant trade negotiations.

Indonesia is a great example of a market that would benefit from predictable, streamlined, transparent, and expedited facility registration process for U.S. exports to Indonesia. U.S. dairy exporters currently wait several years to be registered and eligible to ship while paying some of the most exorbitant fees in the world.   

The EU is another market that IDFA members identify as having protectionist non-tariff policies that prevent U.S. dairy exports. Given the importance of the bilateral relationship, IDFA seeks common sense reform to expand access into the European market for U.S.-origin specialty cheeses and ingredients, while also maintaining favorable terms for many U.S. dairy importers and processors that represent a wide range of products rely on European imports as an essential part of their business model. A strong two-way trade relationship is important for these companies that not only seek to provide European goods to U.S. consumers, also access to critical ingredients that support U.S. processing of what are ultimately then U.S.-origin products for both domestic consumption and exports. Unfortunately, the EU simply continues to invent new non-tariff barriers to trade. Some examples of this include:

• The EU Deforestation Regulation (EUDR), which places invasive administrative burden on producers.
• The EU’s Composite Products Regulation and implemented certification, which applies unscientific and prescriptive certification requirements to highly processed products that are otherwise recognized as low risk worldwide.  U.S. exporters regularly experience significant stoppages related to the certificate.
• The EU’s Antimicrobial Resistance Regulation requires certification to eliminate an extensive list of veterinary drugs irrespective of supporting science or international scientific review and approval for use.

Target Growing Markets

In order to continue expanding our global competitiveness, U.S. dairy needs to strategically approach opportunities for new or expanded access into fast-growing markets.

India

• India is now the most populous country in the world and a large consumer of dairy products.
• We must advance U.S. dairy access to India by supporting a streamlined dairy certificate that simplifies India’s duplicative requirements and by facilitating the development and implementation of an export verification program for those U.S. dairy companies working to meet the terms of India’s dairy certificate.
• Working within the WTO to enforce India’s subsidy commitments and ensure India does not further derail agriculture negotiations at the WTO while distorting world markets remains top priority.

Southeast Asia

• Advocate for increased trade negotiations throughout the region to contain China’s influence and further enhance U.S. dairy exports to these critical and import reliant markets.

China

• Not only is China a major buyer of U.S. dairy, the U.S. dairy industry imports a significant quantity of inputs and equipment from China.
• China could be a stronger buyer than it is, however, as it shores up its U.S. purchases of dairy due to trade tensions while simultaneously investing in its own domestic production.
• IDFA is working to secure trade agreement terms which enable transparent and predictable bilateral access, something China has not lived up to under US- China Phase One Agreement.

Preserve and Reauthorize U.S.-Mexico-Canada Trade Agreement

Mexico

• Mexico is a top destination for U.S. dairy and several important non-dairy inputs for U.S. production also come from Mexico.
• To maintain this essential relationship, we must protect and bolster the USMCA terms as it nears its mandatory review cycle and simplify border procedures for U.S. dairy imports.

Canada

• IDFA continues to press Canada on their failure to abide by U.S.-Mexico-Canada Agreement (USMCA) tariff-rate quota (TRQ) commitments and their price class policies that practically function as export subsidies for protein-dense products.

Prioritizing Reform and Engagement in the WTO

IDFA supports the reform and modernization of the global trading system under the World Trade Organization (WTO), particularly by advocating for the United States to re-engage in active leadership roles in WTO reform discussions.  

IDFA does this by seeking U.S. leadership in reviving agriculture negotiations, innovating opportunities for agriculture-related sustainability discussions, and seeking opportunities to reform and re-establish the Appellate Body, among other things.

IDFA is an active member and leader in the Aggies for WTO Reform coalition and also supports work in important international standard-setting bodies that are referenced by WTO Agreements, like the Codex Alimentarius Commission and International Dairy Federation.

Leverage Current Trade Momentum and Advocate for Stability

Limit Harmful Fees for U.S. Dairy Exporters

• In addition to addressing tariffs and technical barriers to trade, IDFA is advocating for forthcoming trade agreements to target other prohibitive burdens for U.S. exporters.
• This includes pressing for exemptions and reductions from Value Added Taxes (VAT), import taxes, and other excessive fees to provide relief for American dairy processors.  

Provide Innovative and Useful Feedback for Trade Negotiations

• IDFA engages with Administration and Congressional officials to represent U.S. dairy industry priorities and demonstrate updated data on economic impact forecasting.
• Our approach is to be collaborators with the Administration on its objectives, while raising awareness about the unintended consequences of its policy initiatives when necessary.
• We also educate officials on the impact of tariffs by collecting and synthesizing impact data from IDFA members.

Want to weigh in?  Reach out to us at [email protected].

Resources

IDFA also continues to develop trade-related resources for our members.

IDFA has developed the following tracker spreadsheet to help IDFA members track the status, text, and implications for dairy for the agreements that have dairy-relevant details.

[Old LARAVEL BLOCK: PeopleBlock ]