WASHINGTON, July 28, 2025—The International Dairy Foods Association (IDFA) today testified at a U.S. International Trade Commission (USITC) hearing to discuss the competitiveness of U.S. nonfat milk solids (NFS) producers in global markets, specifically highlighting the difference in Canadian policies and their impact on those markets.
Becky Rasdall Vargas, senior vice president for trade and workforce policy at IDFA, delivered testimony at the USITC hearing, emphasizing how Canada’s supply management system creates a persistent surplus of nonfat milk solids by tying farm-level milk production quotas to domestic butterfat demand. Canada establishes a below-market price for Canadian NFS products to clear the surplus, effectively displacing U.S. exports both in Canada and in third-country markets.
IDFA provided testimony today illustrating how “Canadian Supply Management System creates an ongoing and persistent oversupply of Canada’s NFS, leading to an imbalanced, distorted global marketplace for NFS, and creating the incentive for Canada to continue its distortive policies,” said Rasdall Vargas. “These surplus products also supplant U.S. imports and allow Canada to export far greater amounts of milk protein than was designed by USMCA.”
Rasdall Vargas highlighted key findings from IDFA’s economic analysis, which revealed that since 2021, Canadian producers have consistently received farmgate milk prices nearly 38% higher than their counterparts in the U.S., EU, or New Zealand. At the same time, Canadian Government created a below-market pricing formula for supply NFS that permitted Canadian processors to pay a fraction of what other international counterparts paid for protein NFS. This below-market pricing formula enabled Canada to export significant quantities of its protein surplus, such as through Canadian exports of milk protein concentrates, which more than doubled between 2020 and 2024.
Rasdall Vargas also underscored significant shortcomings in the U.S.-Mexico-Canada Agreement (USMCA), particularly Canada’s manipulation of pricing formulas, ineffective tariff-rate quota (TRQ) administration, evasion of export thresholds, and lack of transparency. “Canada’s administration of its dairy TRQs has been problematic, resulting in chronically under-utilized quota allocations,” she said. “The NFS quotas are particularly under-utilized, rarely exceeding 10% utilization of the available quota allocation across NFS product quotas.”
Rasdall Vargas concluded by urging the Commission to focus its investigation on transparency around Canada’s NFS policies, clarifying any market manipulations, and demonstrating the detrimental impacts of such policies on global NFS markets.
Today’s hearing was held in connection with an ongoing USITC investigation which seeks to analyze the production and consumption trends, as well as pricing mechanisms, within the leading international exporters and purchasers of NFS products. To read IDFA’s full testimony, please click here.
