Legislation Raises Production Costs for IDFA

GLOBE - Senator Charles Schumer has introduced legislation to impose trade restrictions on a number of imported dairy ingredients that are used in a variety of food products, reveals the International Dairy Foods Association (IDFA).
calendar icon 18 August 2009
clock icon 2 minute read

According to IDFA, if enacted, it would mean higher production costs for IDFA members and many other food manufacturers. It would impose tariff-rate quotas (TRQs) on imported milk protein concentrates (MPC), casein and caseinates. TRQs are a two-tiered tariff structure with a lower tariff for imports up to a certain quantity, and a much higher tariff for import quantities above that level.

Senator Schumer believes restricting imports of these products, which are derived from milk, would increase demand for U.S. milk and help dairy farmers who are struggling with low farm milk prices. Rather than restrict trade, IDFA recommends a more market-oriented approach that would that encourage domestic production of these ingredients.

Just last month, USDA Undersecretary Jim Miller said that MPCs "are not a significant cause of the economic distress of" dairy farmers.

At a July U.S. House subcommittee hearing on dairy policy, IDFA Chairman Paul Kruse cited domestic production of milk protein concentrates as an opportunity for growth for the U.S. dairy industry.

"Our current policies encourage plants to produce nonfat dry milk, even as few food processors want to use that product," Kruse said. "On the other hand, there is growing demand for products like milk protein concentrates, which many food processors now source from other countries because the United States does not produce near enough. This committee should consider the reasons why we see continued investment in plants to produce nonfat dry milk and not the specialized milk proteins demanded by today’s marketplace."

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