Committee ponders national milk production cut

Friday, January 22, 2010

© AgMedia Inc.
by SUSAN MANN

Ontario farmers’ dairy quotas won’t necessarily be cut if the Canadian Milk Supply Management Committee decides next week to reduce the national milk production target by 0.6 per cent.

At its meeting Jan. 27, the Committee will consider a recommendation to cut the target, known as market sharing quota, from February to July.

Roger Heard, chief economist with the Canadian Dairy Commission, says the national cut would translate into a 0.3 per cent reduction in quotas for each province in the P5 pool, made up of Ontario, Quebec, Nova Scotia, New Brunswick, and Prince Edward Island.

Phil Cairns, senior policy adviser with Dairy Farmers of Ontario, says “there’s no pool decision at this stage to reduce quotas at the producer level.”

The P5 quota committee reviews production trends monthly. A decision to cut each farmer’s quota depends on how production matches the province’s quota.

Cairns says currently production seems to be slacking off “and the jury is still out on whether an adjustment will be required at the producer level.”

Farmers are responding to the slightly less than one per cent quota cut Dairy Farmers implemented in Ontario on Dec. 1. In addition, “they’re adjusting to the fact that we’re reducing the maximum days of over-quota credits (to 10 days from 20 days),” he explains. That 10-day cap on over-quota credits becomes effective Feb. 1.

The Milk Supply Management Committee Secretariat, a group of provincial board staffers and provincial government officials that provides technical support to the committee, recommended cutting the national production target because butter stocks are higher than normal.  Cairns says by the end of December total industry plus Commission butter stocks were 15.1 million kilograms. The target level recommended by the Secretariat is 14 million kilograms.

As of Jan. 15, butter stocks were 17 million kilograms. If nothing is done, its forecast that between now and July butter stocks could be four to five million kilograms more than what’s required, Heard says. BF