U.S. dairy industry seeks relief from costly European due diligence requirements
The International Dairy Foods Association (IDFA) is calling on U.S. trade officials to address growing concerns over European Union due diligence requirements that are affecting American dairy companies.
According to IDFA, new European regulations are creating additional costs and administrative work for dairy processors and farmers across the United States. Industry leaders say the impact is being felt even by businesses that do not sell products directly into European markets.
To support its position, IDFA submitted comments to the Office of the U.S. Trade Representative (USTR) and requested that limiting the reach of the European Union's Corporate Sustainability Due Diligence Directive (CSDDD) become a priority in discussions with European officials.
As part of its efforts, IDFA commissioned a legal review by Steptoe LLP. The analysis compared international labor standards with U.S. federal and state laws that apply to dairy operations.
The review examined key worker protection areas, including child labor, forced labor, workplace safety, freedom of association, nondiscrimination, and working conditions. Researchers found that U.S. laws and international standards often pursue the same goals through different legal approaches.
In many cases, U.S. laws prohibit specific violations and provide enforcement mechanisms. International frameworks, however, frequently require businesses to conduct ongoing due diligence activities such as monitoring supply chains, documenting compliance efforts, engaging stakeholders, and managing grievance procedures.
“The United States has extensive laws protecting workers and the environment, and the U.S. dairy sector strongly supports the protection of human and worker rights,” said Michael Dykes, D.V.M., president and CEO of IDFA.
He added, “But our trading partners should respect our regulatory system just as we respect theirs. U.S. companies should not be required to duplicate or layer foreign regulatory requirements on top of the laws they already follow simply because those requirements are being applied through global supply chains.”
IDFA believes these differences are creating challenges for U.S. dairy companies. Businesses are increasingly being asked by multinational customers to complete social audits and provide extensive documentation based on European or international standards.
The association says this trend is affecting companies that operate entirely within the United States. If a customer does business in Europe, suppliers may still be required to meet audit and reporting expectations connected to European regulations.
As a result, dairy facilities are facing additional questionnaires, inspections, paperwork requirements, and corrective action processes. Some plants may undergo multiple audits from different customers, even when the audits cover similar topics.
Industry representatives report that these audits can be expensive. Initial reviews may cost thousands of dollars, while a complete audit cycle with follow-up activities can approach $27,000 per facility. The process may also require more than 100 hours of employee time for preparation, interviews, and documentation.
Based on member information, IDFA estimates the industry's total financial burden could exceed $29 million before considering additional expenses such as travel, production disruptions and audit platform fees.
The organization also expressed concerns about transparency within the social audit system. Some dairy companies report unclear standards, changing requirements, and limited visibility into how audit scores are calculated. Others have reported paying extra fees to access detailed reports from audits conducted at their own facilities.
IDFA argues that differences between international standards and U.S. regulations do not necessarily indicate weaker worker protections. Instead, the association says the two systems often use different methods to achieve similar objectives.
To help dairy businesses navigate these challenges, IDFA plans to use the legal analysis to identify where U.S. laws already provide protections comparable to international standards. The organization believes this information can help companies better distinguish true compliance concerns from differences in documentation or terminology.
Moving forward, IDFA is asking USTR to work with the European Commission to prevent the extraterritorial application of EU due diligence requirements and secure exemptions for U.S. companies. The association says reducing unnecessary regulatory burdens will help maintain the competitiveness of American dairy processors and farmers while continuing to protect worker rights.
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