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Better Farming Ontario magazine is published 11 times per year. After each edition is published, we share featured articles online.


Dairy licence fees to be raised

Wednesday, October 20, 2010

by SUSAN MANN

Ontario dairy farmers will be paying an extra four cents a hectolitre in licence fees next year if the Dairy Farmers of Ontario board adopts the preliminary budget.

The 2011 preliminary budget listing revenues at $16.3 million and expenses at $16.2 million was supported in principle by the board in September and was presented to delegates at the Dairy Farmers annual fall policy conference last week for feedback. The board will do its final budget review at next week’s board meeting. The budget will also be presented to delegates at the Dairy Farmers annual meeting in January.

Dairy Farmers is projecting a $43,677 surplus for 2011.

The licence fee will increase to 58 cents a hectolitre from its current level of 54 cents a hectolitre. The Canadian Quality Milk (CQM) licence fee will stay at two cents a hectolitre.

Patrick Hop Hing, Dairy Farmers’ finance director, says at last year’s fall policy conference, they were projecting a three-cent a hectolitre licence fee increase for 2011 “to eliminate the deficit position that we budgeted for previously.”

The extra one-cent a hectolitre increase is needed to fund a number of extra items that were “over and above what we had anticipated last year,” he says. 

Hop Hing says “we want to make sure that we run balanced budgets as we move forward.”

The previous deficit budgets were planned so the organization could reduce reserves to the “level we want to maintain, which is four to five months of operations,” he says.

This year, the organization had budgeted for a $686,034 deficit but is now forecasting to end its fiscal year (on Oct. 31) with a $293,966 surplus. In the budget discussion paper presented at the conference, it says interest revenues are $200,000 below budget but other revenue more than offset the shortfall. They include higher licence fee income due to higher than budgeted milk production; the sale of the board townhouse in Mississauga that generated a $220,000 profit; more than $200,000 in cost recovery from developing the CQM (Canadian Quality Milk) administrative system and higher than budgeted raw milk quality penalty infractions and related revenues.

Expenses this year are expected to be below budget because the CQM program roll-out was postponed until next year and there were lower than expected legal costs. BF 
 

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