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.
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