Ontario and Quebec to pool milk supplies

Friday, March 27, 2009

© AgMedia Inc.

by SUSAN MANN

Ontario and Quebec are developing an agreement to pool milk supplies to processors.

Dave Nolan, Dairy Farmers of Ontario marketing logistics director, says the two provinces are working out a deal now and the Maritimes (Prince Edward Island, Nova Scotia, and New Brunswick) will be added later.

The Maritimes aren’t part of the discussions now because they’re small players with few milk plants.

But Ontario and Quebec, whose combined milk production was more than 5 billion litres in the 2007-08 fiscal year, produce most of the milk and have most of the plants within the P5 – the group of provinces that have shared milk revenues and costs for more than 10 years

The idea behind the pooling is to harmonize the allocation policies within the P5 (Ontario, Quebec, Prince Edward Island, Nova Scotia and New Brunswick), Nolan says.

Currently Ontario and Quebec don’t pool their milk volume. “Quebec has their milk, which they allocate to their processors and we have our milk, which we allocate to our processors,” Nolan explains.

Pooling means the provinces will have to use the same terms and conditions to allocate milk to processors to ensure they receive it “in an equitable way.”
 
There are three to four major issues to still be resolved but Nolan declined to say what they are. The target implementation date for the agreement is Aug. 1. BF