Board considers extra credit for milk producers

Thursday, February 5, 2009

© AgMedia Inc.

by SUSAN MANN

Ontario’s dairy farmers may be given some extra room to produce milk above their quotas starting as early as next month as Dairy Farmers of Ontario tries to head off a milk shortage later this year.

At its regular board meeting later this month, DFO’s board will consider adding one production credit day a month starting as early as March and continuing until the fall milk incentive program starts in August. It equates to about three per cent more quota per month that each farmer would get.

Assistant communications director Bill Mitchell says not all farmers can use the extra quota but some will be able to fill it. “The issue is we need to fill the market.”

Last summer’s poor feed quality has resulted in decreased milk production. Current milk supply trends show that Ontario may only fill 98 per cent of its quota this year.

Ontario is not alone. The milk supply in most of eastern Canada is low. Mitchell says “to have the whole pool trending as low as it is right now is a bit unusual.”

When milk production in the entire eastern Canadian region is down, “we can’t depend on a little bit of filling from other provinces,” he says. Butter and cheese stocks are about two per cent lower than a year ago and that “compounds the problem.”

For now, there’s very little impact on current delivery levels, Mitchell says. “Processors draw out of butter and cheese stocks and it’s a fairly gradual thing.”

By implementing production credit days this spring, DFO is trying to prevent a market problem a few months from now. BF