US farmers fight milk product imports

WASHINGTON -- Congress has failed to slow imports of milk products used in cheese, protein bars, and baby food, so American dairy farmers are turning elsewhere in the government for help in making their case.

Milk protein concentrates are dried, processed protein powders created from the ultrafiltration of skim milk. Unlike most dairy imports, they face few import barriers. Farmers say the foreign product is displacing domestic nonfat dry milk in many foods.

Pete Kappelman, a dairy farmer from Two Rivers, Wis., said the United States has become "a dumping ground for foreign dairy surpluses." At a hearing last week before the US International Trade Commission, he said, "It's driven down my milk price and my ability to reinvest in my business."

The independent, quasi-judicial federal agency is conducting an investigation but will issue no recommendations. Dairy industry officials hope the commission's final report, due next May, will provide enough evidence for Congress to impose tariffs on the concentrates. Bills to do so have languished in Congress for three years.

Opposing the tariffs are New Zealand and Australia, the source of most of the imports, and many US food manufacturers.

New Zealand accounts for about 70 percent of the imports and Australia about 10 percent, according to Ed Jesse, a dairy economist at the University of Wisconsin-Madison.

New Zealand's ambassador to the United States, John Wood, told the commission that trade penalties against the product would backfire.

"Other countries would see such US action as an endorsement of tariff renegotiation and be tempted to follow suit," he said.

The Coalition for Nutritional Ingredients, which includes companies such as Kraft and Nestle, is working to head off any tariffs, saying in a statement that they "would raise consumer prices on a wide variety of popular food and snack items."