The Blog

At the risk of being labeled the anti-Christ, I’m here to report that dairy imports—most notably milk protein concentrates (MPCs)—are not the reason U.S. domestic milk prices are where they are.

And, by the way, I’m not the only one reporting this bit of non-news. USDA, the National Milk Producers Federation and the U.S. Dairy Export Federation all acknowledged as much in congressional testimony this past month.

For starters, I’d like to report a few numbers on dairy imports that were released by USDA’s Foreign Agricultural Service last week. Through June, imports of MPCs were down a collective 12% from the same six-month period in 2008. In fact, MPC imports have not been this low for five years, and six of the last seven.

Casein imports, both casein and caseinates, are down a whopping 38% through June. They haven’t been this low this decade. Admittedly, cheese imports are up slightly—1.2%. But that, in part, is due to the fact that cheese imports last year were at their lowest level this decade.

Taken together, MPCs, caseins, cheese and butterfat imports are down 12.7% January through June compared to last year.

And the other amazing thing is that the total tonnage of these imports has very little variation year-to-year since 2001—regardless of whether U.S. milk prices are $10 or $20. There’s a certain level of demand for these products—year in, year out. If they were price-sensitive, you’d think you’d see ebbs and flows with our wildly swinging milk prices.

Mark Stephenson, a Cornell University dairy economist, did some analysis on MPCs this past spring and came to this conclusion: “[Dairy] imports vary quite a bit month-to-month but they are not trending upward in any significant fashion—particularly as a percentage of U.S. production of milk.

“A case could be made that they ‘displace’ or ‘augment’ about 0.8% of U.S. milk production,” Stephenson says. “The milk that is displaced by MPC imports in the United States is the amount of milk from about 70,000 cows.”