Dairy industry revamp stalls

Thursday, April 16, 2015

by SUSAN MANN

A year after dairy farmer representatives tried to kick start negotiations with processors on a wide-ranging plan to revamp the industry’s pricing and policy framework, talks have yet to begin.

Dairy Farmers of Ontario told delegates at the spring policy conference in Alliston at the end of March negotiations were to start this month. That’s about a year after dairy farmers representatives in each province first presented the eight-element plan to each province’s processor organization. Negotiations were originally slated to begin last year and Dairy Farmers representatives said last year the plan was a priority for the organization.

But Peter Gould, CEO and general manager of Dairy Farmers of Ontario, says negotiations haven’t started yet “and we don’t know when they’re going to start.”

The start to negotiations is stalled because “we haven’t agreed on some of the preliminary matters,” Gould explains. He declined to elaborate.

But people are working diligently to get the negotiations started, he says.

Gould is one of two people from Ontario (the other is DFO chair Ralph Dietrich) on both the 10-member producer negotiating team and on the producer steering committee that oversees and directs the team. Representatives on the team include two members each from: the region of the Atlantic provinces, Quebec, Ontario, the region of the Western provinces and national representation coming from Dairy Farmers of Canada. The producer steering committee is made up of the chairs and general managers from the 10 provincial marketing boards plus the Dairy Farmers of Canada chair and executive director.

A seven-member technical committee made up of representatives from the same regions as the producer negotiating team supports the producer steering committee. DFO senior policy adviser Phil Cairns and DFO economist Patrice Dube are the Ontario representatives on the technical committee.

Gould says there are no immediate impacts to the industry or farmers due to the delayed start in negotiations but “it’s important to get this thing resolved.”

In a Dairy Farmers of Ontario document released at the organization’s spring policy conference it says the industry “is approaching a crossroads beyond which the existing policy framework is no longer sustainable.”

The industry needs a “more competitive market environment within the existing domestic pricing and milk classification system” to reduce the industry’s reliance on the Canadian Dairy Commission’s surplus removal program, the document says. The industry also needs to ensure continued milk use at existing domestic price levels in Class 1-3, which are the fluid milk, yogurt and yogurt beverages, ice cream, frozen yogurt, sour cream and cheese classes.

Milk sold to processors in Canada is classified and priced according to its end use. The classes range from fluid milks (Class 1) to planned exports (Class 5d). BF