Licence fee remains the same in 2013 for Ontario's dairy farmers

Wednesday, October 24, 2012

by SUSAN MANN

Ontario dairy farmers’ licence fee remains the same for next year, according to Dairy Farmers of Ontario’s preliminary 2013 budget, but there will likely be increases for the following two years.

The 2013 budget proposal, projecting revenue at $17 million, expenses at $17.8 million and an operating deficit of $688,721, was presented to delegates at DFO’s fall regional meetings across Ontario earlier this month. DFO’s board supported the budget in principle in September and will be doing its final review at next week’s board meeting.

“The board was prepared to support a deficit budget in 2013 because of the forecasted surplus in 2012 and the strong reserve levels,” according to DFO documents released at the fall regional meetings.

For the current fiscal year, which ends Oct. 31, DFO is forecasting revenue at $17.4 million, expenses at $16.8 million and a surplus of $660,613. Its 2012 budget initially projected a $236,259 deficit for the year with $17 million in revenues and $17.2 million in expenses. The organization has about $7 million in reserves.

Some of the assumptions in 2013 budget proposal are:

• a one per cent milk volume production increase to 2.569 billion litres from 2.543,
• reduced Canadian Dairy Commission grants for the Canadian Quality Milk program,
• a 1.3 per cent interest rate per annum and a Bank of Canada inflation target of two per cent,
• a 2.5 per cent allowance for salary increases,
• a 2.5 per cent increase for board payments and committee per diems,
• a three per cent increase in benefit costs due to higher premiums, and
• investments of $1.25 million in each of 2013 and 2014 to upgrade DFO’s mainframe computer software.

In addition to holding the line on the DFO license fee, currently at 61.5 cents a hectolitre, the 2013 proposed budget also calls for no increases to the Canadian Quality Milk fee of two cents a hectolitre. Canadian Quality Milk is the on-farm food safety program that outlines how producers can maintain the safety of milk and meat through risk prevention on their farms.

For 2014, the DFO board favours a proposal to increase the producer licence fee by three cents a hectolitre in each of 2014 and 2015 over another plan to increase the fee by four cents a hectolitre in 2014 and two cents a hectolitre in 2015. The board hasn’t committed yet to either proposal. BF