Dairy board proposes fee increase

Saturday, October 22, 2011

by SUSAN MANN

Dairy Farmers of Ontario’s preliminary budget calls for a 3.5-cent-a-hectolitre increase in the fee farmers pay to fund their organization.

The proposal calls for the fee to increase to 61.5 cents a hectolitre from the current rate of 58 cents. The two-cent-a-hectolitre fee for the national food safety program, called Canadian Quality Milk, remains the same.

Dairy Farmers released the budget documents this week as part of its fall regional meetings being held across the province. Dairy Farmers is gathering feedback from delegates at the meetings. The budget comes back for final review at the October board meeting next week.

The preliminary 2012 budget lists income at $16.2 million and expenses at $17.3 million. The deficit is projected to be $338,759. “The board is prepared to support a deficit budget for 2012 because of strong projected reserve levels at the end of fiscal 2011 and 2012,” it says in the documents.

For this year (2011), Dairy Farmers is projecting to finish the year with a $600,000 surplus. There are several reasons why the actual surplus is a lot higher than the budgeted surplus of $43,766. One is cost savings due to the deferral of the food safety program roll out. Another is lower legal costs due to a significant decrease in litigation for 2011. The third reason is higher than budgeted cost recovery from Dairy Farmers of Canada for the development of the national food safety program administration system.

In other news, delegates are discussing a proposal by Dairy Farmers of Canada to increase the market expansion fee. The national organization’s board approved the proposal to present to members. It calls for the  fee to increase to $1.50 a hectolitre from the current rate of $1.30 a hectolitre and that the increase be phased in over two years. Provincial organizations are being asked to discuss it and make a decision. BF