More dairy quota cuts on the table

Tuesday, September 22, 2009

by SUSAN MANN

Ontario dairy farmers could face cuts of two per cent or more to their quotas later this year with the recovery of a major ice cream company from a plant fire figuring in the decision.

The Dairy Farmers of Ontario board will decide on the timing of introducing an already approved 1.3 per cent cut next week. In October the national Canadian Milk Supply Management Committee will discuss a further cut due to a buildup of butter stocks at the Canadian Dairy Commission. Both cuts could take effect by December or later.

Phil Cairns, DFO senior policy adviser, says combined, the two cuts could total two per cent or slightly higher.

The 1.3 per cent cut is due to provincial quota being over-issued for most of the 2008-09 dairy year to encourage production that had lagged mostly because of poor feed quality. This spring and summer Ontario’s milk supplies were strong due to abnormally cool weather and a build-up of cow numbers.

Another potential factor on milk usage in Ontario is the Chapman's Ice Cream plant fire that destroyed the company’s production facility in Markdale in early September.

Cairns says he can’t reveal the volume of milk Chapman’s regularly used because it’s customer information but notes the company is one of the largest ice cream manufacturers in Canada and the largest in Ontario “so obviously it’s significant in a relative sense.”

Cairns says if Chapman’s does find another manufacturer while a new plant is built, the impact “would be relatively small.”

In the short term while the company works out agreements, “that would translate into butterfat that wasn’t going into the ice cream industry going into Canadian Dairy Commission butter stocks” and trigger a temporary quota cut. Cairns emphasizes the buildup of butter stocks at the Commission is ongoing and not related to Chapman’s.

Owner David Chapman couldn’t immediately be reached for comment. BF