Deciding an issue that has pitted milk producers against dairy processors, the U.S. Customs Service ruled in April that it would not reclassify certain milk protein concentrate (MPC) products and subject them to higher tariffs.

Deciding an issue that has pitted milk producers against dairy processors, the U.S. Customs Service ruled in April that it would not reclassify certain milk protein concentrate (MPC) products and subject them to higher tariffs. The decision was a setback for the National Milk Producers Federation, which has long complained that MPC's slipping into the U.S. through a trade rule loophole has kept milk prices artificially low.

International Dairy Foods Association, praised the decision, calling it a "significant victory for all the food manufacturers who depend on milk proteins to make a wide variety of products and the consumers who enjoy them." IDFA senior vice president Greg Fraser said the Customs Service has always treated MPCs the way Congress intended. But the fight is not over yet. NMPF said it will appeal the ruling to end what it calls the importation of significant quantities of mislabeled foreign dairy proteins into the U.S. without tariffs.

"This situation is one of the worst loopholes in our trade laws dealing with dairy imports," said Jerry Kozak, President and CEO of NMPF. "Unfortunately, rather than rectifying the problem, the Customs Service continues to allow this misclassification to continue, which only hurts U.S. consumers and dairy farmers, while benefiting a few mostly European exporters."

NMPF claims MPCs are actually blends of dairy proteins, primarily skim milk powder with some casein and whey proteins, and thus are not truly concentrated milk. NMPF's appeal will involve two phases and will take a year or more to complete. In the meantime, the current Customs Service classification of MPCs stands.