The Canadian dairy industry is once again under international scrutiny, as the U.S. International Trade Commission (ITC) has initiated an investigation into alleged low-priced dairy protein dumping. The accusation, led by U.S. lobby groups, claims that Canada’s supply management system is allowing its processors to export surplus dairy proteins at artificially low prices, destabilizing global markets and harming major exporters.

The main argument from the complainants, such as the National Milk Producers Federation, is that it makes no sense for a country with such high domestic milk prices to export products like skim milk powder at the lowest prices on the international market. They argue this is because the supply management system, by linking production to butterfat demand, generates surplus milk solids that Canada seeks to “dispose of” in the global market.

In its defense, Canada has responded that its dairy production is oriented toward satisfying domestic demand and that its export volume is too small to distort international markets. The country presented data showing that its share of global exports has decreased, representing only 0.93% in 2023, compared to the 43.8% collectively held by the three largest exporters: the United States, New Zealand, and Germany.