The U.S. International Trade Commission (Commission or USITC) released a report on the global nonfat milk solids (NFS) market and the export competitiveness of the nonfat milk solids industries in the United States and other major suppliers including Australia, Canada, select EU member states, and New Zealand.

This investigation, Nonfat Milk Solids: Competitive Conditions for the United States and Major Foreign Suppliers (Investigation No. 332-607), was requested by the U.S. Trade Representative (USTR) in a letter received on April 23, 2025.

The request states that the report should cover the following:

• An overview of the global market for products containing high NFS levels in their various forms, including such factors as product end uses, consumption, production, and trade.
• Profiles of the industries producing and exporting products containing high NFS levels in the United States, Australia, Canada, selected European Union (EU) member states, New Zealand, and other countries that may be relevant, including information about domestic production, consumption, and export trends in these countries.
• A comparison of the competitive strengths and weaknesses of producers and exporters of NFS products from the United States and other major exporting countries, focusing on factors affecting delivered costs, product differentiation, and reliability of supply, as well as government policies and programs that directly or indirectly affect the production and exports of NFS products from these countries.
• An overview of the competitiveness of U.S. NFS products relative to exports from the highlighted countries both in the U.S. market and in third-country markets.

Major Findings of the Investigation

• Raw milk is the main input to NFS processing and accounts for approximately 80-90 percent of NFS processing costs. As a result, an industry’s milk pricing system and associated government milk pricing policies affect the competitiveness of major NFS processors and exporters.
  • In Australia, the EU, and New Zealand, pricing of raw milk is largely the result of direct negotiations between milk producers and dairy processors.
  • The United States and Canada both use milk class pricing systems to influence raw milk and milk component prices, but Canada’s system unlinks its relatively high farmgate price of milk from the price that NFS processors pay for milk components in Cananda.
• Access to a large, stable and ideally growing supply of raw milk and milk components—particularly protein—is a key driver of competitiveness in NFS processing. Among the industries profiled, the United States has the greatest capacity for milk supply and component growth, while growth in the EU’s milk supply stagnated and Australia’s milk pool shrank over the period.
• Global production and trade of NFS products with higher protein levels are increasing, driven by rising consumer demand for protein.
• Global exports of NFS products were dominated by three major suppliers during the 2019–24 period: the EU, the United States, and New Zealand. Together, they accounted for nearly 85 percent of total exports in 2024, and averaged about 83 percent from 2019 to 2024.
• The United States is a major supplier of NFS products to the largest importing regions of such products—including East Asia, Southeast Asia, and Latin America and the Caribbean, as well as the U.S. domestic market. The United States is a major producer and exporter of bulk, commodity NFS products as well as high-protein NFS products.

Nonfat Milk Solids: Competitive Conditions for the United States and Major Foreign Suppliers (Investigation No. 332-607, USITC Publication 5732, April 2026) is available on the USITC website.

About Factfinding Investigations

USITC general factfinding investigations, such as this one, cover matters related to tariffs, trade and competitiveness and are generally conducted under section 332(g) of the Tariff Act of 1930 at the request of the U.S. Trade Representative, the House Committee on Ways and Means or the Senate Committee on Finance. The resulting reports convey the Commission’s objective findings and independent analyses on the subjects investigated. The Commission makes no recommendations on policy or other matters in its general factfinding reports. Upon completion of each investigation, the USITC submits its findings and analyses to the requester. General factfinding investigation reports are subsequently released to the public unless they are classified by the requester for national security reasons.