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But now theres high demand for the fat content of milk Time magazine had an eat butter cover story a few years ago, in 2014, he notes so farmers are shipping milk to creameries. And whats left over is ultrafiltered milk, or milk protein. U.S. dairy farmers have been selling that ultrafiltered milk duty-free to Canadian processors. Mark Stephenson , director of Dairy Policy Analysis at the University of Wisconsin-Madison, said it was in the early 2000s when the product started being exported into Canada, and it has increased in volume. It became a noticeable line from Canadas point of view, he told us. Canada does have a protectionist dairy industry, with quotas on milk production and regulated pricing on milk products, Stephenson said in a phone interview. But that system can only really befunctional if they can keep a pretty tight reign on a product coming in. Other dairy products imported into Canada are subject to tariffs, but since ultrafiltered milk is a relatively new phenomenon in the milk industry, its simply not on the list. It wasnt restricted when NAFTA or earlier World Trade Organization negotiations occurred, Stephenson said, in terms of a quota or a tariff. So when ultrafiltered milk gets to the border, he explained, custom officials say, Yep, no restrictions on that trade.' Canadas dairy industry overall wasnt part of NAFTA, something that could change if NAFTA is renegotiated. Instead, NAFTA opened up the dairy trade between the U.S. and Mexico, an issue brief published by Cornell University in April 1994, the year NAFTA went into effect, explains.
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