Diafiltered milk issue sours on slow federal response

CNS Canada — Two weeks after rallying on Parliament Hill to protest Trans-Pacific and European trade agreements, some dairy farmers say the government is still slacking when it comes to supporting their industry.

The immediate crisis, according to Jan Slomp, a Vancouver Island dairy farmer and president of the National Farmers Union, is diafiltered milk.

The U.S. has long been able to export the powdered protein product into Canada tariff-free, since it’s considered a “protein substance” for customs purposes but is considered “milk” for dairy processing purposes by the Canadian Food Inspection Agency.

“They are circumventing the tariff wall in a very sophisticated way, a very dirty way, if you ask me,” Slomp said. “Private processors (in Canada) add it in their cheese fat and get way higher yields from the same amount of product for a very low price… It costs Canadian producers volume of production.”

Canadian dairy farmers are currently struggling with a surplus of skim milk powder, Slomp said, due to a shift toward consuming more butterfat and less milk.

Instead of buying skim milk powder from Canadian dairy farmers, processors are choosing the cheaper option, helping the U.S. reduce its surplus of skim milk powder in the form of diafiltered milk and adding to Canada’s.

“It’s putting tremendous pressure on our system,” Slomp said.

The federal government has held consultations with producers, processors and regional agricultural associations from across the country to identify measures for a long-term solution, federal Agriculture Minister Lawrence MacAulay said via email.

“The government of Canada is aware of industry’s concerns regarding the use of diafiltered milk,” MacAulay said. “Consultations have been productive and constructive, and (we) remain attentive to the needs of industry.”

Cheese compositional standards also ensure a minimum percentage of diafiltered milk is used in the making of cheese, MacAulay added.

Dairy Farmers of Ontario has proposed the government subsidize equipment so they can produce diafiltered milk and compete with the cheap imports, Slomp said, adding it’s a proposal with which dairy farmers across Canada disagree.

“The only reason (diafiltered milk) was invented was to circumvent the tariff wall… there is absolutely no need to create it,” Slomp said. “It would make trade a holy cow with no purpose.”

Slomp said the government may be taking steps to support dairy farmers, but it’s not enough.

“They want to promote trade, but this isn’t about trade… it’s defending a very legitimate sector of Canadian agriculture and it would be very fair for (the Canadian government) to be blunt about not allowing this product to come into Canada.”

— Erin DeBooy writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting. Follow her at @ErinDeBooy on Twitter.

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