Dairy Executive Urges Congress to Address Canadian Trade Practices and Protect Export Growth
ARLINGTON, Va. — A senior executive from Dairy Farmers of America (DFA) told U.S. lawmakers on Wednesday that stronger enforcement of the United States-Mexico-Canada Agreement (USMCA) will be critical to maintaining growth and stability in the North American dairy sector as the trade pact approaches a formal joint review.
Michael Lichte, Chief Insights and Optimization Officer for DFA, appeared before the House Committee on Agriculture to outline concerns over Canada’s handling of dairy market access commitments under the agreement and to emphasize the importance of preserving export opportunities for U.S. dairy producers in both Canada and Mexico.
Lichte testified on behalf of the National Milk Producers Federation, where he serves as a board member, and the U.S. Dairy Export Council, where he is a director.
“Export demand now accounts for 17% of total U.S. milk production and has become one of the primary drivers of incremental growth across the dairy sector,” Lichte said. “For DFA and the U.S. dairy industry broadly, USMCA remains one of the most consequential trade agreements affecting long-term competitiveness, manufacturing investment, and farm-level economic stability. That’s why it’s essential that we strengthen and renew it.”
Canada and Mexico Remain Key Markets for U.S. Dairy
According to testimony presented at the hearing, Canada and Mexico together represent more than 40% of all U.S. dairy exports by value, making the two countries essential trading partners for American dairy producers and processors.
Lichte’s remarks focused heavily on Canada’s administration of dairy tariff-rate quotas, commonly referred to as TRQs. Under USMCA, Canada agreed to provide expanded access to its dairy market through these quotas. However, U.S. industry groups have long argued that the system has been structured in ways that limit the practical ability of exporters to fully utilize those market openings.
During his testimony, Lichte cited what he described as persistent underfill rates across several dairy product categories through 2025. He said industrial-use cheese quotas reached a cumulative fill rate of only 64%, while fluid milk quotas stood at 34% and skim milk powder quotas at just 7%.
Industry groups contend those figures demonstrate ongoing barriers to trade despite commitments made under USMCA.
Lichte also raised concerns about Canada’s handling of dairy protein exports, arguing that Canadian exporters are using alternative tariff classifications to move surplus dairy proteins into international markets while avoiding export caps negotiated under the agreement.
He pointed to a May 2026 report from the U.S. International Trade Commission that confirmed the growing use of such classifications.
Concerns Extend Beyond Canada
While much of the hearing focused on Canada, Lichte also stressed the importance of maintaining U.S. exporters’ ability to use common cheese names in Mexico, including terms such as “feta.”
The issue reflects broader concerns within the U.S. dairy industry over geographical indication rules that can restrict the use of certain product names in export markets. Industry representatives argue that preserving access to common food terminology is important for maintaining competitiveness and avoiding unnecessary trade barriers.
The upcoming USMCA review is expected to provide an opportunity for all three countries to assess implementation of the agreement and identify areas where enforcement or modernization may be needed.
For the dairy industry, the review comes at a time when exports are playing an increasingly important role in sector growth. Rising global demand for dairy ingredients and protein products has encouraged manufacturers to invest in processing capacity and expand export-oriented production.
Lichte told lawmakers that maintaining fair access to North American markets will be necessary to support continued investment across the sector.
“The underlying market distortions USMCA sought to discipline continue to affect U.S. manufacturers and global dairy protein markets,” Lichte added. “With appropriate enforcement and modernization, USMCA can continue supporting investment, export growth, and economic opportunity for the United States’ dairy farmers and processors for generations to come.”
Trade Review Could Shape Future Dairy Investment
The USMCA, which replaced the North American Free Trade Agreement in 2020, includes a mandatory joint review process intended to evaluate the effectiveness of the agreement and determine whether updates are required.
Trade observers expect agriculture, particularly dairy, to remain one of the most closely watched sectors during those discussions given longstanding tensions between the United States and Canada over market access.
For U.S. dairy producers, the outcome of the review could influence future export growth, processing investment and the competitiveness of North American supply chains at a time of increasing global demand for dairy products.