American dairy groups urge Canada to fairly allocate import quotas and address export pricing, without ending supply management protections.
Cross-Border Dairy Tensions Resurface
American dairy industry leaders say their goal isn’t to dismantle Canada’s supply management system—but to ensure Ottawa respects the terms of the Canada-U.S.-Mexico Agreement (CUSMA). Despite past political rhetoric, U.S. producers argue that their concerns focus on market access fairness, not systemic overhaul.
Industry Says It’s Not About Scrapping Supply Management
Shawna Morris of the U.S. Dairy Export Council and Becky Rasdall Vargas of the International Dairy Foods Association clarified that the U.S. dairy lobby does not seek the end of Canadian supply management. Instead, they emphasized the need for Canada to adhere to CUSMA’s rules, particularly around import quota allocations.
How Quotas Are Allocated Remains a Key Issue
CUSMA grants U.S. producers tariff-free access to about 3.5% of Canada’s dairy market, divided into 14 product categories. However, U.S. industry officials argue that Canada primarily allocates these quotas to large domestic processors, like Agropur and Saputo, who have limited incentive to import competing American goods.
Imports Rise, But Targets Still Missed
Despite the rise in dairy imports since CUSMA’s implementation—reaching $897 million in 2024—U.S. exporters say quota volumes consistently go unfilled. They attribute this to restrictive allocation practices, not a lack of demand, and call for quota reassignments to retailers and food-service sectors to improve access.
Dumping Allegations Over Milk Protein Exports
Another concern centres on Canada’s export of milk proteins at prices lower than global averages. U.S. producers argue this is an artificial result of Canada’s high domestic pricing under supply management, allowing surplus milk solids to be dumped on the international market. The U.S. International Trade Commission is investigating the issue.
Legal Challenges and Political Pressure Mount
The Biden administration previously challenged Canada’s dairy quota allocations twice—winning in 2021 and losing in 2023. Now, under President Trump, a new round of scrutiny has been launched. Trade officials believe Ottawa may be more responsive now than in the past, partly due to the amplified pressure from Washington.
No Changes to Quotas—But Room for Reform
A bill passed in Canada’s Parliament in June protects the existing quota levels and tariff rates. However, it leaves room for administrative reforms—such as who receives quota access and how unused quotas are managed. U.S. producers see this as an opportunity to reset the balance without touching core supply management.
Looking Ahead
As trade tensions persist, U.S. dairy leaders say they are hopeful for a shift in tone. “We’re not looking to rewrite Canada’s dairy rules,” said Rasdall Vargas. “We just want those rules to be applied fairly so the deal works as intended—for both sides.”
