by SUSAN MANN
Dairy Farmers of Ontario wasn’t told in a November 2012 letter from Chobani why the company has indefinitely postponed building its Greek yogurt manufacturing plant in Kingston.
Peter Gould, the supply-managed organization’s general manager and CEO, told delegates at the DFO annual meeting last week in Toronto they received the letter about the postponement a week before the plant’s construction groundbreaking ceremony was to be held in Kingston. It had been scheduled for Nov. 16, 2012. Chobani was formerly called Agro-Farma Canada Inc.
Gould said DFO representatives have talked to Chobani officials since then and were told, “it wasn’t a final decision one way or another. The plans were on hold pending further decisions at the company level.”
New York-based Chobani obtained a supplementary import permit last year to bring its Greek yogurt, made in the United States, into 65 grocery stores in the Greater Toronto Area. The permit expires next month. The permit enables the company to avoid paying the 237.5 per cent duty on yogurt imports into Canada while it determines if there’s a market here for its yogurt. The company says on its Chobani website its yogurt is the number one selling yogurt in the United States.
Gould said in an interview at the meeting he doesn’t know what happens to Chobani’s sales in Canada once the supplementary import permit expires. “I think it’s reasonable to expect that getting an extension to their supplementary import permit would be conditional on a clear indication (from Chobani) that they would be building a plant.”
Asked what happens when the import permit expires next month, Chobani chief communications officer Nicki Briggs said by email the company continues to work closely with all levels of government. “We are not able to confirm any more details at this time but will share news and updates as soon as we are able.”
Briggs explained the company’s Canadian production plans are “still a work in progress and require a sizable amount of planning and logistics.” As the company works through those, the plant announcement has been postponed.
Gould said in the interview “they (Chobani) have given no indication that they are not going to continue or that they are going to continue.” Chobani is a “big business and they make their decisions. We’ll respect their plans whatever they do.”
As for DFO’s reaction to the postponement, Gould said, “I think everybody was hopeful that they would build a plant because it represents investment and opportunity in the Ontario economy.”
But whether the company plans to proceed with building the plant “has nothing to do with the availability of milk,” Gould said.
There has been speculation in some major Canadian daily newspapers the company pulled out of Canada because the supply management system has hampered its efforts to get the ongoing milk supply it needs. But DFO officials said that’s not true.
On Nov. 30, 2011 DFO’s board made the decision to supply Chobani with milk and skim milk “of sufficient quantity that it would allow them to proceed with their plan to build a plant,” Gould told delegates.
DFO’s milk supply commitment to Chobani doesn’t expire, and if Chobani decides to build a plant the milk and skim milk would be available, he noted.
In a phone interview last May, assistant communications director Bill Mitchell said he couldn’t reveal how much milk DFO allocated to Chobani because information about individual processors is confidential.
Gould said in the interview he too couldn’t reveal the amount of milk Chobani has been allocated. Asked if Chobani got all the milk it requested, Gould said: “that’s a loaded question. They had multiple requests. What we provided certainly satisfied at least one of their requests.”
Gould noted from his knowledge of the industry it’s a “substantial quantity of milk and skim milk, enough to build a good-sized plant.”
Meanwhile, sales of Greek-style yogurt in Canada are booming. Gould told delegates at the meeting Greek-style yogurt has grown to more than 10 per cent of the yogurt market from one per cent during the past 15 months. “But there hasn’t been a noticeable change in the total growth in yogurt, which is roughly one to two per cent a year,” he said, noting Greek yogurt sales appear to be displacing other types of yogurt now.
In terms of the total market on a butterfat basis, yogurt uses about two per cent of the Canadian butterfat requirements, Gould said. BF
Comments
In late 2010, information released by the Dairy Farmers of Ontario (DFO) showed that the farm gate price of milk in Ontario was within pennies per litre of the US retail price, and now, just over two years later, DFO claims to be unable to understand why Chobani is postponing building a yogourt manufacturing plant in Ontario. DFO is being, therefore, slippery with the truth when they claim Chobani's hesitancy has nothing to do with the supply of milk, yet they carefully avoid the topic of price, and so they must because it's the price which is, in these situations, always the deal-breaker. Indeed, there's every possibility Chobani has already figured out that, even with a 237.5% tariff barrier, and even with a strong demand for their product, the cost/volume/profit equation arising from the artificially-high cost of milk in Canada, isn't going to generate either the retail sales, or the margins, they require to justify building a plant - and that nobody at DFO seems to have figured this out, or even seems to be able to figure this out, speaks volumes about the fairy-tale world at DFO where price, unlike anywhere else in the real world, is never part of the marketing mix.
Stephen Thompson, Clinton ON
This has been an interesting story and now an interesting development in it. I'm trying to figure out though why something that happened in November is only being written about in the middle of January. There are two places this update could have or should have come from. Greek yoghurt is a big story for the dairy industry and so is the building or not building of a plant.
This story has so-much stupidity, and so-much bungling, and so much "it's all about me, and nobody else" greed on the part of everyone in the Canadian dairy industry, it should have been aired on either the Air Farce or Saturday Night Live. If anyone, or any industry, completely deserves to be on the receiving end of the "Chicken Cannon", it's the Canadian dairy industry. It's also pretty-much guaranteed that Cabinet Ministers at both the federal and provincial level are now, even more than ever, being told by senior business types, from all sectors of the economy, that they need to be distancing themselves from supply management, and the imbeciles running it, and the sooner the better.
Stephen Thompson, Clinton ON
Stephen, Even Better W5 or Mrket Place, because this needs some investigative journalism, to blow the top off this scam,
When are people finally going to realize that People like my self, Thompson and Bauerman are the canary in the coal, i guess likely once its to late, then the greedy Sm guys will cry wolf and say but no one warned us, poor us, please Mr Government help us little millionaire farmers.... We can't live like the rest of agriculture lives like, were to good for that ....
Sean McGivern
PFO
The National Post, and the Globe and Mail, regularly publish stories outlining the greed, the absurdity, and the stupidity, of supply management - yet, every time they do, the supply management propaganda machine goes into overdrive. The trouble with SM's type of propaganda, however, is that, just like the Hans Christian Andersen story about "the King with no clothes", eventually the only people who believe who still believe the propaganda, are the people who produce it. Non-supply managed farmers under the age of 40 have never believed it, and won't start now - and if anyone wants to hear vitriol, just ask this group what they think about a quota buyout. That demographic truth is the truth SM desperately wants to ignore, but can't.
Stephen Thompson, Clinton ON
What is not noted here is that just days before Nov 30th, 2011, the P5 introduced yogurt plant quota. Prior to that you could get all the milk that's needed for yogurt.
If this is a miracle product or company where are they going to sell all of it. Is it so that good that people that don't eat dairy are going to rush right out and buy it? Are people who do eat yogurt going to do the taste test and switch? There are only so many people that like dairy and I don't believe that they need a whole lot of milk products that are not being produced now to fill the void. Its nice to dream though?
It just boils my blood when people post the BS they do with zero knowledge, they are currently importing this yogurt under a speical trial permit the market is already there, do some reasearch before wasting peoples time with foolish posts
Sean McGivern
PFO
That person is either someone in the dairy industry trying to down play this story, or someone that is clueless. It would take less time to google 'chobani yogurt', and you would be immediately informed that Chobani is a company which has skyrocketed to #1 in sales in the U.S.A in 4 years and has since brought its product to Canada, than it would to write that comment. With a little more research you could also find out that yogurt sales have increased in Canada, when most other dairy products have not. It is nice to dream though. Raube Beuerman, Dublin, ON
Notice the website it said is the #1 selling yogurt in the US. Its all a Pr promo people with lots of money can promote whatever and whenever they want and say their product is recommended by 9 out of 10 what? If there is 3 out of 1,000,000 say something is bad is it really that bad or they just don,t like it? Canada has great dairy products and great rules in place to bring great milk to our table and beyond, at the very least its not being manufactured in China or Mexico and lord,s know what they put in or do with it before we get it. Its time people start talking about the amount of food or products coming into Canada from those country and stop slamming the farmers here that work every day to put great food on our tables, and I think that some people just cannot let it go.
I,m not a dairy farmer and I like the fact that when we go to the store you can look at the blue cow on the label and know it comes from and made in CANADA.
I,m tired of looking at fruit , seafood, pickles and more every day coming from China or India. So let the readers and consumers decide if they want to buy made and manufactured in Canada or over seas and get on board with the rest who love the made in Canada food and products.
If you truly "love" to pay almost 38% more than you need to pay to buy milk, go right ahead, but how dare you, or anyone else, tell consumers that, for the good of only 15,000 quota-owning millionaires, that they have no choice but to pay this extra amount? Furthermore, how dare you tell non-supply managed farmers that you obviously "love" to see them at a permanent disadvantage when it comes to incomes and purchasing power when compared to the 15,000 supply managed millionaire farmers? Sorry, but I smell something fishy here - if you're not a dairy farmer, you would appear to either be married to one, or you're farming 50 miles away from the nearest supply managed farmer. You're certainly not a non-supply managed farmer under the age of 40 from Huron County. Either way, you obviously just don't understand basic economic principles which make it impossible to "love" protectionist policies which force consumers to divert spending away from other things, in order to shelter only a select few farmers from economic reality.
Stephen Thompson, Clinton ON
You don't seem to understand what this is about. This story is about a turkish immigrant, who came to the U.S, who then developed a yogurt and marketed it in the U.S.A with great success. That is a fact. Now they would like to offer it to Canadians, but are bullied by sm politics. They were also willing to use Canadian milk and make it in Canada, not China or Mexico as you stated. But I am sure that China and Mexico are capable of producing quality food also. I also read somewhere that Chobani uses more milk in it's yogurt than any other yogurt maker. Secondly, your last statement does not make sense, the readers and consumers have virtually no choice when it comes to supply managed products. Finally, for the 3rd time, please do a little homework before posting. Try googling "chobani supply management". Raube Beuerman, Dublin, ON
While my son and I were recently in Korea visiting my daughter, the butter we ate, was a product of New Zealand - I'm fairly certain that new Zealand dairy farmers are more than a tad outraged that fearmongering Canadian farmers would lump New Zealand's dairy products into the "potentially-unsafe" category. I guess, also, if New Zealand butter was good enough for Delta to serve us on the flight home from Seoul to Detroit, it should be good enough for even the most "fraidy-cat" Canadian farmer, but, then again, fear-mongering is what Canadian farmers seem to do best, especially when it serves their wallets to do so.
Stephen Thompson, Clinton ON
I don,t think yous understand every place you read buy local and not food produced thousands of miles away. Okay so SM farmers have a monopoly on their produce but its farmed, made and consumed in Canada. Look at the organic food people are willing to pay the extra so why not the SM food that is solely Canadian. Look at the none SM produce that has nothing to do with any farmers in Canada that is done in a third world country with slave labor and you hear that the farmers hear could not produce that low of price or a manufacturing could not hire anyone for a couple of dollars a day here in Canada. They can bring a jar of pickles or some peaches etc. thousands of miles away cheaper than we can produce it at home, if all the food was a bit dearer there wouldn,t be a problem with over weight people. So if the name calling is done I would like to buy Produce and Made in Canada food for a bit more than buy food or products that has nothing to do with anybody hear but in the store.
I know personally SM farmers that have brought in cheap labour from other countries to work on their farms so don't even go down that road. Look at some chicken catching crews
Your proposals are regressive to over 30 million consumers, and of benefit to, at best, only that 2% of the population who actually farm. And, you've gotta be kidding about making food so expensive that people starve themselves into shape - all you would do by that is turn consumers into even bigger slaves, and substantially-meaner slaves, to extortionist Canadian farmers than they already are. And to follow your convoluted logic one step further, we might as well force farmers to give up tractors and return to farming with horses because while there are a lot of obese farmers in the mainstream community, who has ever seen an overweight Amish farmer? I'm sorry, but that's exactly how bad your so-called "logic" really is. And, really, are New Zealand farmers slaves? Are US dairy farmers slaves because US consumers get to buy milk for 38% less than Canadians have to pay? More to the point, you have ignored the fact that we have slaves in Canadian agriculture - they're the non-supply managed farmers who are at a permanent income and purchasing power disadvantage to the 15,000 supply-managed millionaires. Why are you worried about slave labour in some "third world country" yet not concerned in the least about the economic slavery supply managed farmers impose not just on other farmers, but on over 30 million Canadian consumers?
Stephen Thompson, Clinton ON
Supply management was introduced to (a) increase prices (b) stabilize prices (c) preserve the family farm, and to some extent, it has done so, but at the price of destroying the family farms of anyone/everyone not in supply management. Supply management was not supposed to (a) adversely affect consumers (b) adversely affect other farmers (c) adversely affect processors, and (d) adversely affect our far-larger export oriented interests, including those in agriculture, but it has done all of those things, and then some. Most importantly, supply management was not supposed to create a rural aristocracy, and bureaucracies which serve no purpose other than to defend that aristocracy by any means, fair or foul. To the surprise of no-one with any background in economics, and to the surprise of no-one with any common sense, one fallacy after another about supply management has gradually, yet absolutely, fallen by the way-side over the years. For example, the Dairy Farmers of Ontario (DFO) spent the better part of 40 years boasting about cross-border retail price equivalency, but in late 2010 finally admitted that Ontario consumers were paying almost 38% more for milk than US consumers, and that the farm gate price of milk in Ontario was within pennies per liter of the US retail price. In addition, the Chobani example completely dispells the myth that processors "like" supply management and believe it is somehow "good for them". It is also becoming increasingly clear that supply management has created a counter-revolution among non-supply managed farmers under the age of 40, who have no desire to spend the rest of their lives as second-class citizens ("slaves") in their own communities, and in their own occupation. Yet, however, one of the saddest aspects of human nature is that people with any sort of legislated entitlement seem to be pathologically unable to see "the writing on the wall", and Canadian dairy farmers are, rather obviously, completely unable to see it either.
Stephen Thompson, Clinton ON
Don,t you realized the Us farmers get a cheque from the government for not having SM, and you ask where does that money come from its the tax payers. Talk to some of the farmers down there and see how the small and medium size farmers are doing, they don,t get a bigger cheque like the large farms do but they still get one. I tour the US back roads a lot and talk to many farmers of different farming and they will tell you its hard being small down there to make a living. Many of them has off farm jobs and put in a lot of hours to make ends meet. Well I guess there are only a few people that knows how a perfect world works and I guess I will never know but I,m raising a family and making ends meet and I like to give my opinion doesn,t matter if some people don,t like it and I don,t start calling the people that don, like it names like kids in the sandbox.
Supply management penalizes (or enslaves) the poorest group of consumers, those the most likely to stop drinking milk entirely, and therefore, is a regressive tax, and detrimental to both economic and public policy. A subsidy, however, is paid out of tax revenue where the rich, and corporations, pay in proportion to their income(s). While neither is desirable, when it comes to economic and public policy, a subsidy is far-better because it doesn't penalize poor consumers, doesn't create quota monsters, and doesn't adversely affect trade relations, doesn't (normally) get capitalized back into asset values, and, most-importantly, forces farmers to realize they aren't the centre of the universe. In basic economic terms, "subsidy" isn't nearly as dirty a term as "supply management", and it's time Canadian farmers, especially those who enjoy enslaving consumers and their fellow farmers, realized it.
Stephen Thompson, Clinton ON
Over years i have made dozens of trips to the USA, to visit many of my Amish and Mennonite friends who farm there, Most of them are involved in dairy farming milking 20 - 100 cows and most of them residing In WI, NY, OH, IN, PA, All very strong dairy States, None of these Amish or Mennonite farmers take any government money they are all family operatd with no non family employees and they all pasture cows and they all have other things going on such as cropping, vegetables and other livestock these are very diverse farms once again let me remind you they take no government money. How ever they live a lifestyle that is much more inline with the rest of agriculture here in Ontario that is not suply managed. Supply managed farms in Canada have been over conpensated for far to long and this has led to a system of have's and have not's. I am not sure why SM farmers have this mentality that Non SM farms are so heavily subsidized, because we are not and i can tell you that i personally have never once taken or been given a single penny from the government and i dont think i am much different from the majority of the farmers out there.
When land values in Huron, Perth and Oxford are double the land values in Chathan, Kent and Essex counties then you dont need to be a rocket scientist to figure out that supply managed farms have been highly over compensated for what they are doing to be able to drive land prices to the levels they are in counties with the highest levels of SM farms.
Sean McGivern
PFO
A hidden consumer tax or taxpayer support? Or, tell my wife, who, 9 years ago when I met her was a single mother of 3 barely getting by, (and working long hours) why she should should have to pay about $2 more per 4L of milk to feed her kids, which she was buying about twice a week. Do the math, on milk alone we are close to $200 per year, factor in cheese, yogurt and any other dairy and/or chicken products that number will close to double. If you doubt my numbers, they can be varified by the OECD. Raube Beuerman, Dublin, ON
(1) supply management doesn't cost consumers anything, but after close to 40 years of making the claim of cross-border retail price equivalency, the Dairy Farmers of Ontario finally admitted, in late 2010, that Ontario consumers were paying almost 38% more for milk than US consumers.
(2) supply management doesn't pit farmers against each other, but no non-supply managed farmer under the age of 40 believes it.
(3) subsidies are bad, but enslaving consumers, particularly poor ones, through supply management, is good.
(4) the subsidies received by non-supply managed farmers somehow puts them on a "level playing field" with supply managed farmers.
There may, of course, be more, but normally, even "three-strikes" is enough to call "batter-out".
Stephen Thompson, Clinton ON
It looks like we have a yogurt processor in a province east of Ontario, who is opposed to yogurt competition because it would mean more potential milk production for Ontario, at a possible loss of milk for them, if Chobani is as successful in gaining market share in Ontario, as they have been in the U.S.A. Looks like certain processors and sm(especially in a certain province) are sleeping in the same bed.
As a Ontario dairy men Im very disgusted with the whole chobani milk war! Supply management is very much so on the table on trade talks right now.How can an industry such as sm create somany obstacles for a new dairy that want to buy milk off Ontario dairy farmers! Dfo deserves a big F in the event chobani doesn't come! Our markets shrinking every year our markets our stale and yet we just keep coming back to the cdc and say we need more money for our milk. This business model is simply unsustainable! How can a industry survive trade talks when we are currently selling the same about of milk today compared to 1959. And chicken farmers only fill 75% of the market. SM was put into place to bring price stability and market growth. Milk has no market growth at all! Just look at the quota cut in Dec. In Canada we hv a very complex dairy and feather CARTEL! The question remains is when SM is traded off some day how many farmers will be ready? A 40 year old system will not last forever? Are you ready to compete with your neighbors and fellow SM farmers? All other ag sectors will laugh at th SM farmers when this day comes and will have little if not any sympathy!
You'll do well when, not if, things go sideways because you are one of the few who can see "the writing on the wall". When Chuck Strahl, the former federal Minister of Agriculture, asked supply management groups what their "Plan B" was in case supply management disappeared, they not only didn't have one, they didn't even understand the concept - you obviously do, congratulations, you'll be one of the survivors. And let me guess, you don't go to many DFO meetings, or even any CFFO meetings (if you happen to be a member), because you can't stand to listen to the self-serving BS. And, yes, I do frequently get calls from other farmers in supply management who agree with you entirely, but who would never voice their opinions publicly, and who are always hovering over the decision about when to "pull the plug". Thanks for the posting, and your honesty.
Stephen Thompson, Clinton ON
That,s what I been saying all along that if the new yogurt is that good they will take the market away from the other guys. Its not going to bring more milk production if it does very little, they can lower the price way low and force somebody out which some people will say its a big success story.
Chicken Farmers of Ontario, has it made it clear they have no support for small farms in Ontario, please read their letter sent to the Practical Farmers of Ontario, on January 18th 2013. It can be viewed on our web site at www.practicalfarmersontario.ca under the "Small Flock Campaign" Tab,
Its a sad day In Ontario Agriculture when I read the pathetic response they have sent to us.
The CFO has been overtaken by greed, its both rather funny and greatly concerning to think that most of the Chicken Farmers of Ontario's members are also members of the Christian Farmers of Ontario, Matthew 19:24 Again I say unto you, it is easier for a camel to go through the eye of a needle, then for a rich man to enter into the kingdom of God.
tax payers and consumers i believe on a whole are willing to support a fair and just food system, but i do not believe they are willing to support this disgusting system of greed that has allowed a very select few to become millionaires on paper just because their forefathers were granted a lic to produce chicken.
I vow to spend my efforts and my personal money to bring this house of cards down and return some fairness and equality to small farmers at what ever cost it takes, enough is enough, this nonsense has to stop...
Please help me to make the changes needed
Sean McGivern
PFO
To see what the business community, and therefore, everybody in Canada except 15,000 millionaire quota owners, thinks about supply management and the Chobani fiasco, link to http:opinion.financialpost.com/2013/01/18/terencecorcoran-the-chobani-mi...
As always, the comments are the most-interesting part of any article of this sort, and go further than even Corcoran would dare. The truly-horrifying thing is that there are any farmers who support supply management at all, let alone how-many, as well as how-completely, and how-unquestionally, they support it
Stephen Thompson, Clinton ON
Editor's note:
Unsigned comment deleted.
SM seems to be a thorn in the side of at least 3 people? We were raised if you can,t afford something don,t buy it and through life if we could not afford 1 kind of food we did not buy it or we had it for a treat and we still live by it today. Milk and products , Chicken and eggs same as beef and fruit or vegetables if its not on sale or have a 50 % off sticker we don,t buy it or eat it and I work every day to make ends meet. Guess yous have think that people has a right to get or eat anything they want for not having to work or wait to have enough money to buy it? Go VEGAN you don,t need milk or cheese ,etc. don,t need chicken or its eggs and turkeys, don,t need beef ,pork or seafood and all you buy is vegetables and nuts or seeds lots of people live by that. So why is it that some people say that you need to eat animals and milk products and have a right to buy it cheap.
If people on the receiving end of the benefits of supply management had even the faintest clue what it's like to do without, especially in the same way they force others, particularly consumers, and other farmers, to do without, then nobody would feel the need to continually point out the double standards and outright-hypocrisy on which supply management depends for its existence. It's forcing non-supply managed farmers to do without the ability to buy land and pricing products out of the reach of consumers (why else would milk consumption be declining?) so that supply managed farmers can benefit, which is, and always has been, the problem supply managed farmers, and the organizations which pander to them, refuse to address, or even admit.
Stephen Thompson, Clinton ON
I don,t only see sm farmers the only ones buying land big times. I see beef farmers , cash croppers and even see machine dealers buying land and clearing whatever there is to get the max. amount of land. Its all GREED doesn,t matter how you look at it more you get the more you want. So you can sit and blame the SM farmers all you want ,open your eyes and look around there is a pile of land being sold and there is just no room for some young guy or gal by themselves to buy a 200 parcel of land for a reasonable price and start farming. Its the way it is and if the government try and give some form of help, guarantied the ones who get the money is someone who have a helping hand from someone else and not the lone ranger. So keep on dreaming, Alice is gone home years ago.
It's abundantly clear to anyone with eyes, and, based on their studies of actual sales, it has also been made clear by Valco consultants in at least two recent local meetings, that supply management is directly responsible for the land price bubble currently underway in Huron, Perth, and Oxford counties. Those of us without access to the incomes and purchasing power available only to supply managed farmers, are paying a terrible price for this legislated imbalance. What's worse is that our children are, quite-understandably, deciding to flee the farm rather than spend their entire lives as second-class farmers in their own communities. Who could blame them?
Stephen Thompson, Clinton ON
well I,m not from any of those counties I,m stating what I see from the land purchases around me. If those 3 counties are the only land in Ontario or Canada I guess you may be right, the last time I looked I was still living in Canada . Like I said if SM were not buying China would be on the doorstep wanting it or someone else with more money than a young guy or gal could afford and make a living without the backing of a rich parent or parents. The pop. is growing and the land is running out.
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