The Battle of Other Milk Solids

Did you know that there is a pitched battle being waged over the composition of cheese?

Since technological advances have made possible the creation of a whole new generation of milk products (for example, isolates or milk protein concentrates), which are not necessarily subject to tariff quotas and can therefore be imported freely into Canada,(2) how the FDR and the DPR are interpreted clearly has economic implications for industry stakeholders. On a practical level, the use of isolates or imported milk protein concentrates allows cheese processors to reduce their costs, since imported milk protein is typically much cheaper than milk protein originating in Canada. Therefore, it is to the processors’ advantage to rely on the DPR interpretation whereby all milk solids can be used in cheese production, in that this interpretation allows for an increase in low-cost milk protein imports. However, this interpretation puts Canadian dairy producers at a serious economic disadvantage in that a higher level of milk protein imports would result in reduced revenues from milk sales. When cheese processors import milk proteins, the result is lower sales of milk proteins derived from Canadian milk. Canadian milk proteins are thus “displaced” by imports and must be sold off on domestic markets that yield a low return, such as the market for animal feed. This state of affairs translates into major economic losses for Canadian dairy producers. Therefore, strict enforcement of the FDR is very beneficial economically for Canadian dairy producers.

I thought another side of the whole cheese vs. globalization issue was that we did not allow milk producers to use their own milk to make cheese, but that wasn’t mentioned.