by SUSAN MANN
A stable dairy market coupled with high production this fall means Ontario’s dairy farmers will be hit with a 1.5 per cent quota decrease starting Jan. 1, 2013.
Patrice Dube, Dairy Farmers of Ontario economist, says the reason “we are reducing quota is not because the market has dropped. The market is stable. It’s just that the production level is very strong and we need to bring that production level back in line with the market.”
Parkhill-area dairy farmer Chris Vander Vloet, who milks 160 cows on his organic dairy farm, says “they (Dairy Farmers of Ontario) have to do what they have to do.” He adds that he has “a lot of faith and trust in the DFO.”
Vander Vloet notes while it would be nice to have quota increases all the time, he supports the supply management system and “this is what has to be done to keep everything in balance.”
Dairy Farmers announced the quota decrease on its website this morning. The decrease will be applied entirely to farmers’ non-saleable quota. Non-saleable quota was introduced in August 2009 as part of harmonized quota policies among the five provinces involved in the eastern milk pool. Whenever there is a quota increase that applies to all farmers, that amount becomes the non-saleable portion. The last quota adjustment was in December 2011, when a two per cent quota increase was implemented to stimulate additional production.
The provinces in the eastern milk or P5 pool are: Ontario, Quebec, Nova Scotia, New Brunswick and Prince Edward Island. They share revenue from industrial and fluid milk markets and work cooperatively on other matters of mutual interest.
Dube says all Ontario farmers have enough non-saleable quota to cover off the decrease. “Before the cut, we were at 5.3 per cent non-saleable and then after the cut we will be at 3.8 per cent.”
The P5 quota committee recommended the decrease and the Ontario board along with the boards in the other provinces approved it. A third reason the P5 quota committee recommended the quota cut was that there is a surplus of available production credits that can potentially be filled by farmers.
After analyzing the P5 market, milk production levels, and the amount of quota issued, the committee found that the P5 provinces would likely be over their quota early in 2013.
Dube says the forecast before the reduction was implemented was the P5 would be over its quota by 2.6 million kilograms of butterfat or about one per cent. BF
Comments
If I am not mistaken, it is my understanding that Chobani is not pursuing to build in Ontario anymore because of issues with the sm system. How many potential new jobs were lost? Wouldn't this have been a win win for urban and rural people? This makes zero sense to me when we have existing and/or new farmers that would love to fill this market. Now there is a "quota decrease" shortly after Chobani is denied access to a future milk suppply? I have read that competing yogurt processors were not keen on Chobani entering the market, but isn't sm here to give the farmers a monopoly, not the processors? Did I miss something, when were processors given monopoly powers? Is there not a free market for yogurt competitors, even if they were all using 'Canadian' milk? Situations like this one will continue to give Canada's dairy system, processors included, a black eye, the kind of publicity it doesn't like, but deserves. Raube Beuerman, Dublin, ON
This quota decrease is just the latest example, and at Christmas, no less, of supply managment's "Robin Hood in reverse" policy which is, in effect - "take from everybody, give to nobody". In any business but dairy and poultry farming, it's always about giving the consumers more choice, and at a better price - it's too bad, thanks to supply management's bungling of the Chobani proposal, Ontario consumers of dairy and poultry products are going to have to continue to shop in the US to find it. If I was a dairy farmer in either Michigan or New York State, I'd be sending DFO a Christmas card, thanking them for all the Ontario consumers, and not just the ones who want to buy Chobani yogourt, DFO is increasingly sending to the US.
Stephen Thompson, Clinton ON
There is a very simple way to fix the supply management system, first we decide on a sufficent and reasonable farm size. That should be decided by the amount of work one couple can realisitcally do. Then we generate a floor price and build in a subsidy forumula to ensure the farm is profitable, but not over paid.
So realistically if your a dairy farmer who is doing a superior job on herd health, reproduction, cow comfort and has top production and genetics improvement plans in place, 40 cows is really all one family can look after and do the best job possible. So if a farmer wants to milk over 40 cows there should be zero subsidies on all milk that is produced from any cows after number 40 based on a provincal average for milk production and the processors would have to settle all of their producers payment through the DFO so there is price transparency, this way processors would be forced to pay a fair price to producers to get the additional milk they require and a formula price could be calculated and i believe in most situations almost none or very little government subsidy money would be required at all. Also a permit system could be put in place preventing any one single producer from being able to ship more then the milk production of 100 cows preventing any mega farms from starting and controlling to large a portion of the market. We could have a very vibrant, inclusive dairy and feather sector that aren't creating insane land values fueled by over paid mega farms, with a monopoly to protect them at the expense of the rest of the farm community.
Sean McGivern
PFO
i agree only first 1000l per day get the higher fliud price the rest sold at lower industry price up to 3000l per da y a special permit to go above 3000l per day all producer should the option of having a sometic count of up to 750,000 and getting the lower industy price and shipping to processing plant not drinking we arte making our industry non competive i want to keep supply management but we need to change it stephen blyth
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