Automatic quota adjustments begin in August

Friday, July 23, 2010

by SUSAN MANN

The committee responsible for overseeing Canada’s milk marketing plan is reinstating   the automatic adjustments of national provincial quotas used to target production of industrial milk.

John Core, CEO of the Canadian Dairy Commission, says the Canadian Milk Supply Management Committee decided Wednesday to begin using the automatic adjustment process for market sharing quota (the quota for industrial milk nationally that each province is allocated a share) again starting Aug. 1. The process uses a formula applied bi-monthly to measure stocks and Canadian requirements to indicate if there should be increases or decreases in the industrial milk quotas issued to provinces. 

The Committee had suspended the process to help reduce a large surplus of butter stocks. Industrial milk is used to make products like cheese and yogurt.

“We essentially froze the quota for six months that allowed us to absorb the surplus butterfat into the domestic system,” Core explains, noting the approach took about 800 tonnes of butter out of the system. “That allowed the butterfat that was in stocks to move into normal levels.”

Market improvement has also helped reduce the surplus as has increased cream sales, which have reduced the amount of skimoff from fluid, he adds.

The Committee has also extended the Domestic Dairy Product Innovation program for one year. The current program was slated to end July 31. The long-running program, intended to boost overall milk demand, issues milk to processors to launch products to tap new markets.
 
Core says the Committee agreed to share the quota allocated to the program nationally. Previously the program only had projects in which processors obtained milk from producers in their province. Alberta representatives had objected to the restriction, arguing that the program should be fully national and the allocated quota shared nationally. BF