U.S. Dairy and NAFTA

U.S. Dairy and NAFTA

The importance of the North American Free Trade Agreement (NAFTA) to U.S. dairy farmers cannot be overstated. In recent years, dairy exports to Canada and Mexico averaged nearly $2 billion per year and accounted for 30 to 40 percent of all dairy exports. For comparison, in 2016 only 2 percent and 8 percent of U.S. dairy exports flowed to EU-28 and China respectively.

Since NAFTA’s implementation, dairy product exports to Canada and Mexico have totaled approximately $21 billion and increased by more than 500 percent from pre-NAFTA levels. The primary dairy products exported include non-fat dry milk, cheese, milk proteins, whey, butter and milkfat. The U.S. also imports a variety of dairy products from Canada and Mexico. These products include processed dairy foods, specialty cheeses, and butter valued at $691 million in 2016.

The net trade balance (exports minus imports) in dairy products with NAFTA members has grown from several hundred million dollars per year to more than $1 billion each year. The cumulative trade balance in dairy products stands at $12 billion in favor of U.S. dairy farmers and dairy product manufacturers.