Tuesday, 02 January 2024 12:17 GMT

Could Your Protein Powder Cost More? The US-Canada Trade War Is Putting Whey At Risk


(MENAFN- Live Mint) The latest US-Canada trade tensions are hitting an unlikely corner of the food market: whey protein.

US-Canada trade war reaches the protein aisle

Whey, a by-product of cheese -making, is a key ingredient in protein powders, shakes, snacks, and increasingly popular high-protein foods. Now, manufacturers on both sides of the border are scrambling to deal with tariffs and restrictions that could make the ingredient more expensive and harder to source.

The US is set to prohibit imports of several Canadian dairy products, including certain whey products, from 29 September. The move follows Washington's decision to impose additional duties on Canadian dairy products, while Canada has responded with its own tariffs on US goods.

Also Read | US-Canada trade war: Carney expects new tariffs to hurt some businesses

The Canadian government has listed whey protein concentrate and several forms of powdered whey among products facing a 50% counter-tariff on US imports.

For businesses that rely heavily on the ingredient, the disruption is already being felt.

Jim McMahon, chief executive of British Columbia-based Fit Foods LP, told CNN that his company depends on US suppliers because the highly processed whey it uses has limited availability in Canada.

“If there's no tariff relief, it's devastating for consumers, retailers and us,” McMahon said, according to CNN.

Why whey is difficult to replace

The problem is not simply a matter of finding another source of protein.

Canadian farmers produce whey, but the country has significantly less cheese production than the US and fewer facilities capable of processing whey into the concentrated forms required by protein manufacturers. That makes switching suppliers difficult.

Also Read | Trump could use US military to make Canada 51st state, Carney tells NYT

Companies could theoretically turn to alternatives such as pea protein, which is not subject to the same tariffs. But changing an established product is far more complicated than swapping one ingredient for another.

Manufacturers may have to reformulate recipes, adjust production processes and rebuild parts of their supply chains.

Aaron Skelton, president of the Canadian Health Food Association, told CNN that businesses were already struggling to identify alternatives.“Economic tools can be turned on and off fairly quickly. Supply chains can't,” he said.

Consumers could eventually pay more

The pressure is also reaching the wholesale market.

According to USDA data cited by CNN, US whey protein concentrate prices reached a record $13 per pound in June, about 250% higher than a year earlier. Prices later eased to around $10-$11 per pound, but manufacturers have warned that consumers have not yet absorbed the full effect of those increases.

That could mean higher prices for protein powders and ready-to-eat products containing whey in the months ahead.

The impact will not necessarily be identical across the two countries. Canadian manufacturers face particularly acute supply concerns because of their reliance on US whey, while American consumers could see higher prices as the broader disruption works its way through the market.

Also Read | Up, up and a-whey! Soaring whey costs force protein firms to turn to plants

The latest measures are part of a much wider deterioration in trade between the two neighbours. The US announced a ban on selected Canadian dairy products, alcohol and motorcycles from 29 September, while Canada introduced retaliatory tariffs on roughly $20 billion of US goods earlier this month.

For the fitness industry, however, the trade dispute has brought a surprisingly simple concern into focus: keeping protein on the shelves without making it significantly more expensive.

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Live Mint

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