by SUSAN MANN
The organization representing Ontario’s dairy farmers wants to see an analysis of economic models to determine if a proposed national 15-cents per hectolitre promotion fee increase makes sense.
Earlier this year, the management of Dairy Farmers of Canada (DFC) proposed the increase, which would raise the promotion fee to $1.45 per hl from the current fee of $1.30 per hl.
The proposal went to the DFC board in April for their comment. Representatives there agreed to take the proposal to their provincial organizations for decisions.
Ian Harrop, Dairy Farmers of Ontario second vice-chair, says the board doesn’t have a position on the proposal yet: “We're at the stage right now where we'd like to see some very defined numbers on this and to see the best econometric models.” He says it would be tragic if farmers were charged more to pay for advertising with very little gain. “It wouldn’t be good due diligence.”
The national organization would be responsible for providing such analysis, he says, adding that in Ontario any increase in the promotion fee would have to be approved at the annual meeting held in January.
But “realistically for this to work properly all of the provinces have got to agree to increase the fee,” Harrop says.
Ian MacDonald, DFC national director of marketing and nutrition, says it’s very unlikely that some provinces would agree to the promotion fee increase and others wouldn’t. “It’s done by negotiation so they all have the objective of being the same.”
He adds this hasn’t been an issue when previous promotion fee increases were implemented and he doesn’t think it will be this time either. Once all the provinces discuss the proposal and pass it then it is implemented. There isn’t a target date for implementation.
Some provinces have started discussing the proposal, MacDonald says, but so far none have passed it.
MacDonald says there hasn’t been a promotion fee increase since 2003. “Clearly over that period of time costs of doing business in the media world and marketing world have gone up considerably.”
MacDonald says during the last two years the food industry was less affected compared to other industries by the recession and dairy “actually had done quite well.”
In terms of the future, MacDonald says DFC will need to be prepared to deal with public relations concerning nutrition-type issues, such as obesity and the fat content of food.
Next year DFC is slated to spend $59 million for promotion spread across the different categories. DFC does all the promotional activities for Ontario and the Maritimes plus the cheese promotion for the Prairie provinces and British Columbia. The western provinces do their own fluid milk and real cream promotions. Quebec does all its own cheese, fluid milk and real cream advertising by relies on DFC for nutrition-type campaigns. BF
Comments
They're like blind men trying to describe an elephant, one by touching the legs, another by touching the trunk, and another by touching the tusks. They'll do everything possible except wake up to the realization that they don't need any model to tell them that lowering the price of milk is what they need to do.
But this is the fairy-tale world of supply management, and when, not if, supply management implodes, they'll finally have to wake up to the realization that lower price is the fact of life in the real world, not something they can continue to blissfully ignore.
Instead of trying to coerce the consumer with advertising, why don't they do consumers a favour, and lower the price? The worst that could happen is that per-capita consumption of dairy products might actually increase.
One has to understand the whole picture to see why they are advertising a controlled market.
About fifteen years ago the Marketing board got rid of small dairies in favor of the big three.
On the last processing day of Sun Rise dairy John Core chair man of the ODF told me that the Dairy farmers did not have to deal with little milk companies as people will buy fluid milk no matter what the label on the bag so one dairy is really enough.
So they stopped shipping milk to the plant sending a strong message to other past small dairies.
Now they have the big three dairies and are very happy as this is big business and not farming now.
Last year the big three dairies told the ODF bring the price of milk down or else
The DFO said no so the big three now import four billion dollars worth of powder to make Canadian cheese.
The DFO has no other plants or companies to sell their milk to so.
So the ODF has no control over globalization so they devised a plan to advertise --made with Canadian milk --in an effort to make it look good for the real farmers and get the sales back the sales they enjoyed with smaller dairies and competition in the market place and Canadian cheese was made with Canadian milk.
The real farmers are depending on the ODF to stop the influx of illegal milk , while the ODF state another thousand farmers will quit milking (why).
Real farmers need to wake up, were was the shirt on your back made? welcome to globalization
Please Google Bernie Bailey and read about the last dairy then contact Carol Mitchell at 519-482-5630 to save your farm.
Still one vote
Bernie
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