Milk protein concentrates (MPCs) have recently become a hot topic in discussions about dairy trade and tariffs. This month’s poll seeks to show producers both sides of the debate. Should foreign MPCs be allowed to be used in U.S. foods? If you have comments or points of view that you think need to be discussed, please vote and let us know. Producer comments will be shared in the next two issues of Progressive Dairyman.

0410pd_poll

No Imported MPCs

As a dairyman who has talked with experts and intensely studied the milk protein concentrate (MPC) issue, my first concern of allowing foreign MPC in food is its contribution to milk price volatility. From July 1998-December 2008, monthly MPC imports ranged from 2 million to 10 million kilograms (kg). Graphing this 10-year MPC import data illustrates 33 “MPC import spikes” (dramatic kg change). “Down spikes” (toward 2 million kg) had a corresponding up-tick in Class III milk price, but rapid “up spikes” of MPC imports (toward 10 million kg) seemed to create new negative price trends, including a longer-lasting low price. As MPC import quantity and volatility has grown over time, so has milk price volatility.

In 2008 imported MPC and casein totaled 13.5 billion pounds milk equivalent or almost 7 percent of the total milk supply. Total imports have outpaced exports in 13 of the past 16 years. Financial responsibility of this powder import-induced oversupply needs to be a serious additional topic of discussion in the dairy industry. One possible solution – other than tariffs on MPCs – could be a targeted “variable make allowance” that rewards processors for using exclusively American milk.

MPCs and other milk powders, whether produced domestically or imported, carry a potential food safety risk. According to Rafael Jiménez-Flores of Cal Poly San Luis Obispo, “Endospore-formers present in milk powder can survive processing conditions in many formulated foods, and thus, after germinating and growing they can be hazardous if ingested.” Consequently, foreign milk-producing MPC powders need be held to U.S. dairymen’s on-farm and off-farm quality and regulation standards.

As a consumer, I am also aware of the “Slow Food” movement. Slow Food rejects overly processed products like those containing MPCs. Slow Food promotes eating items that your grandmother would eat, ingredients that a third-grader can pronounce and local food that is perishable. Slow Food argues that because of less food processing and higher quality local food in 1960, we spent 19 percent of our income on food and 7 percent on health care, whereas today it is 9 percent food and 17 percent health care.

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Finally, imported MPCs should not be mixed with American milk so that we may safeguard our milk image that has been hard earned with sweat, blood and tears on our dairy farms. Sherry Bunting, a reporter for Pennsylvania’s weekly Farmshine, summarizes MPC use best, “It’s like reinventing milk: boost the protein, hold the carbs, add the non-caloric sweetener.” Like it or not, this reinventing of milk carries the risk of potentially negative food safety/health news headlines. Embracing increasing MPC consumption in food without safety testing could have long-term unintended negative consequences for our industry. PD

Bryan Gotham is a dairyman at Gotham Family Farms. Email Bryan Gotham.Visit Bryan's Blog

Import MPCs

Editor’s note: The following is a compilation of quotes from IDFA’s website and “Bringing dairy policy into the 21st Century,” an article written by Connie Tipton, President and CEO of IDFA. IDFA declined to write an opinion on this topic when invited by Progressive Dairyman.

“Opposition to new tariffs on milk protein concentrates (MPCs), caseins and caseinates was another top priority for the meetings with lawmakers on Capitol Hill during the IDFA’s annual Washington Conference. Industry officials stressed that new tariffs are unnecessary and cited a recent International Trade Commission study that blames the lack of domestic MPC production on the Federal Dairy Price Support Program, which discourages industry investment in the technology to make MPCs.”

IDFA website

“Thanks to the pricing formulas, whey protein isolates (WPIs) manufacturers subject to Federal pricing regulations were placed in a government-created cost-price squeeze and unnecessarily lost money producing some of the industry’s most-promising products. They had to pay minimum milk prices based on skyrocketing prices for dry whey, which has no relation to prices for WPIs. (Footnote from article: Manufacturers of milk protein concentrates (MPCs) are also held hostage by the pricing formulas since the price of the milk they buy is based not on the market for MPCs, but on the market for nonfat dry milk powder.) As a result, owners of WPI plants in federally regulated areas were sent a powerful message that the FMMO pricing formulas can turn the tables on otherwise favorable investment opportunities in innovative dairy products.

“Supportive of trade expansion. The safety net should not include policies that distort global markets, undermine industry competitiveness and clash with our global trading obligations.”

Bringing Dairy Policy into the 21st Century

“Senator Charles Schumer (D-NY) introduced legislation on July 30, 2009, to impose trade restrictions on a number of imported dairy ingredients that are used in a variety of food products. If enacted, it would mean higher production costs for IDFA members and many other food manufacturers.

“The legislation (S.1542) would impose tariff-rate quotas (TRQs) on imported milk protein concentrates (MPC), casein and caseinates. TRQs are a two-tiered tariff structure with a lower tariff for imports up to a certain quantity and a much higher tariff for import quantities above that level.

“Schumer believes restricting imports of these products, which are derived from milk, would increase demand for U.S. milk and help dairy farmers who are struggling with low farm milk prices. Rather than restrict trade, IDFA recommends a more market-oriented approach that would encourage domestic production of these ingredients.

“If the bill were to pass, products from Mexico would remain excluded from the new tariff-rate quotas under the North American Free Trade Agreement (NAFTA).

“This is not the first time this legislation has been proposed. IDFA has consistently and effectively blocked this type of legislation for at least 10 years. Unfortunately, the current persistent low milk prices have caused this ill-considered concept to reemerge.” PD

IDFA website