An international increase in protein consumption, paired with recent expensive tariffs on American dairy products, has led to a global shortage of Canadian whey products, coinciding with a surge in prices. Many Canadian dairy farmers are adapting to this demand by producing milk with higher protein content. However, economists suggest that significant investments in whey processing infrastructure are necessary to keep pace with the rising global need.
Kevin de Vos, the owner of Foxtrot Dairy in Salmon Arm, B.C., mentioned adjustments in breeding selection to enhance protein concentration in future milk production. Changes in milk pricing formulas in Canada reflect a growing preference for higher protein content, prompting modifications in feeding programs to achieve the desired protein-to-butterfat ratio.
Graeme Crosbie, a senior economist at Farm Credit Canada, noted a shift in demand from butterfat to protein in Canadian milk. The surge in global protein consumption, particularly whey protein concentrate, has caused prices to rise significantly due to supply shortages. Monika Tothova, a senior economist at the United Nations Food and Agriculture, emphasized the gap between consumer preferences and processing capacities in the cheese industry.
With limited processing plants in Canada for converting cheesemaking whey into whey protein concentrate, retailers like Kallum Mitterer of True North Protein rely on imported whey from the U.S. The escalating prices and uncertainty surrounding retaliatory tariffs on dairy imports have added pressure to the supply chain, affecting businesses like Hello Amino, where founder Aelie Swift anticipates price hikes for their products.
As the trade war persists, Canadian dairy exports, including whey products, face restrictions in the U.S., while U.S. dairy imports into Canada incur a 50% tariff. The Canadian Dairy Commission is closely monitoring market developments to support the dairy sector amidst increasing global protein demand. The commission highlighted the direct correlation between whey availability and cheese production levels in Canada due to the co-product nature of whey in cheese manufacturing.
Canada’s dairy quota system ensures producers are not incentivized to overproduce milk solely to meet whey protein demands, acknowledging the need for a balanced dairy market.