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A new product from Country Crock labeled as “dairy-free butter” has sparked growing concern within the dairy industry.

The dairy industry urges FDA action against ‘dairy-free butter’ labeling, citing federal standard violations and consumer confusion.

The dairy industry is mounting a strong pushback against the use of traditional dairy terms, particularly the word “butter,” on plant-based alternatives. The American Butter Institute (ABI) has formally requested the U.S. Food and Drug Administration (FDA) to take decisive action against products like Country Crock’s “dairy-free butter.” The ABI argues that such labeling is misleading and violates federal standards, which define butter as a product made exclusively from milk or cream.

This intensifies the ongoing struggle within the agribusiness sector to control the narrative around butter labeling. Christopher Galen, executive director of the ABI, contends that plant-based manufacturers are attempting to “leverage the premium perception of real dairy butter.” He labels the term “butter” for plant-based products as a “total oxymoron,” which could undermine the integrity of food labeling. The dairy industry’s argument hinges on federal identity standards, which legally define butter as a milk-derived product.

By allowing “fake butters” to use the term, they argue, the regulations are breached, and it potentially misleads consumers within the dairy product market. This debate is not new. The National Milk Producers Federation raised similar objections in 2019 regarding plant-based butter labeling. The dairy industry maintains that only milk-origin products should use dairy-specific terms.

The outcome of the FDA’s decision on this matter could greatly affect the competitive dynamics between dairy and non-dairy markets, highlighting the growing regulatory challenges faced by both traditional dairy producers and plant-based innovators.

Galen emphasized that labeling a non-dairy item as butter is a direct violation of federal standards. Galen remains hopeful that the Trump administration will give the complaint careful consideration and respond with greater sympathy to their concerns.

A newly released 2025 report from the International Dairy Foods Association (IDFA) unveils the remarkable economic contribution of the U.S. dairy industry.

According to the report, the dairy sector not only supports an impressive 3.05 million jobs across the nation but also contributes nearly $780 billion to the U.S. economy. This comprehensive economic impact underscores dairy’s role not just as a food supply, but as a crucial economic driver and job creator.

The vast interconnectedness of dairy farms, processors, and related industries highlights the sector’s influence on the broader economic fabric. The financial contributions from this industry also extend to public finances, generating $83 billion in taxes that bolster public services and infrastructure nationwide.

Moreover, the U.S. dairy industry’s export capabilities further solidify its stature, with $8.2 billion in annual exports, enhancing the nation’s international trade position. These findings emphasize the sector’s substantial influence, making it an essential component of both national economic health and global market presence.

In response, the IDFA aims to broaden awareness of the sector’s contributions through increased engagement in industry and public discussions.

China officially banned the use of reconstituted milk in the production of sterilized milk under the latest revision of its national food safety standards.

China has approved new food safety standards that will ban the production of drinking milk from dry milk powder from September 19, 2025. From then on, only raw milk will be allowed to be used to make sterilized milk.

The innovation is intended to increase the level of control over the quality of dairy products and support domestic producers.

Reconstituted milk, also known as recombined milk, refers to a milk emulsion made by mixing dry dairy products with water in specific proportions.

“Put simply, it’s just milk powder mixed with water,” said an expert. The expert noted that the revisions align with both industry demands and consumer expectations for higher-quality dairy products

The ban on reconstituted milk is also expected to drive up demand for raw milk. Since sterilized milk will be made directly from raw milk — naturally rich in bioactive nutrients — it is expected the move will improve both the nutritional value and taste of the final product.

The decision became part of the updated regulatory framework, including 50 new standards and nine amendments approved as part of the state food security strategy. Previously, similar restrictions were already in force in the EU, Japan, and were also supported by the WHO and the UN FAO.

Powdered milk is also the second most frequently adulterated product in the world after olive oil. In the history of the food industry, there have been cases of adding urea, formalin, alkalis, acids and melamine to imitate full-fledged milk.

The ban in China may significantly change the structure of international trade in dairy products. According to analysts, exporting countries, primarily New Zealand and the EU, will be forced to redistribute supplies of powdered milk and adapt product lines to the new rules.

In the United States, reconstituted milk may only be used for sterilized milk production in regions with limited milk supply.

China remains the largest consumer and importer of dairy products in the world. Tighter standards are expected to reduce demand for imported milk powder, increase the share of domestic whole milk production and affect global price trends in the sector.