supply management

Dairy Dilemma

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Uncertainty. Instability. A constantly changing environment. In this pandemic this is true for many sectors of the economy and of course for most of our readers in their personal lives too. The dairy industry and your local dairy farmers are no exception to this. Although farming has rightfully been deemed an essential service, this does not insulate nor protect us from a rapidly evolving market and changes in consumer habits.

When social and physical distancing measures came into place a few weeks ago, demand for dairy products surged as our consumers tried to anticipate and plan for the unknown. Was a total lockdown imminent? This led to millions of consumers stocking up on essentials, including milk. Grocery stores struggled to keep milk on the shelves and soon limited the amount of dairy products each consumer could purchase. Farmers were asked to produce more milk to meet this increased demand.

But at the same time, different aspects of the marketplace were also in flux. Restaurants and coffee shops either closed or began operating at reduced capacity. This has led to a reduction in demand for dairy products packaged in ways that are not usually available in your grocery stores: think of butter in tiny containers, bulk shredded cheese for pizza companies, 250mL milk cartons for schools, etc, etc. It’s no easy task for processing companies to switch to retail ready packaging and involves so many logistical layers, such as a bigger supply of bottles, containers, and labels, different packing lines, and so on. Our provincial dairy boards and dairy processors have been scrambling to keep up with this rapidly evolving situation. Obviously this is something that our boards and processors have never before experienced nor is it something they could have planned for.

Dairy farmers and their boards and committees have donated excess milk to food banks. We’ve donated funds to charities and non-profits to help them purchase dairy products for the needy in our communities. Our boards have done their utmost to try to avoid wasting milk but some farms have now been asked to dispose of the milk in their bulk tanks to eliminate the excess supply.

It’s devastating watching perfectly good, nutritious milk not end up where it was meant to be: in your fridge and on your table.

While we are very aware that we are so fortunate to still have a job to go to every single day, seeing the product of our hard work go down the drain just hurts. I won’t sugar coat that. The farmers who will be asked to dispose of their milk will be compensated; it’s a loss that will be shared across provincial milk pools. All dairy farmers will share this burden of lost income equally. We all are hopeful this will be a very temporary measure and that stability will soon return to the market, allowing our boards to more easily anticipate and plan for a balance in supply and demand. That’s the whole goal of our Canadian supply managed dairy system: we balance the needs of our consumers with the supply of milk from our family farms. But cows don’t have a tap that we can turn on and off. If a cow produces 30L of milk today, she will do that tomorrow too, and the next day, and the next, and the next. It is thus very difficult to react quickly to sudden market fluctuations.

How can you help? Buy milk. Purchase some cheese or ice cream to enjoy with your family. Enjoy real cream (dare I mention whipping cream?) in your home brewed coffee. The milk is here, it’s available, it’s ready to be processed, shipped to the retailers, then purchased by you to feed your families. Please be patient with us. We ask for your understanding as our industry tries to adjust to this new, strange environment. We pray that extreme measures like disposing of milk will be short lived and that solutions will be quickly found to find a way for this milk to end up on your table.

Rest assured that your farmers are still working hard to provide you and your families with top quality, ethically produced, nutritious dairy. This is a tough time for our industry (as it is for so many sectors) but our commitment to our animals and to you our consumers has not wavered. We’re here for you. Be safe. Be well. Much love to you all.

Is Starbucks Really “Ditching Dairy”? Top Company Execs Say No!

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About a month ago, the global community of dairy farmers was rocked by news headlines that proclaimed that Starbucks was “ditching dairy” and instead planned to promote plant based beverages “for the environment”.

We were doubly shocked. You see, two weeks earlier, we had been asked if we’d be interested in hosting a farm tour for Starbucks top executives looking to expand their knowledge on dairy farming. The tour facilitator explained that intention of the tour was to learn more about the environmental sustainability of dairy and dairy farming. We were happy to oblige because we truly do love hosting tours; but I must admit that the thought of hosting top execs from a multinational, well-recognized chain was a bit intimidating.

And then we heard the news that Starbucks was planning to phase out dairy. It was confusing to say the least, as we know first hand just how environmentally conscious we are as farmers. But it also made us very aware of the importance of our upcoming opportunity to showcase just how much dairy farmers do to steward and improve our land and environment while producing nutritive and delicious dairy. 

On Tuesday, February 11, Starbucks executives toured three farms in the Fraser Valley of British Columbia, and four more just across the border in Whatcom County, Washington State. We spent an hour and a half with this group: we showed them our farm, shared our family’s generational story of dairy farming, described our passion for stellar animal welfare, highlighted how we follow the latest research on animal care, reported on how we have partnered with the University of British Columbia on several research projects, and detailed all of the ways we steward our land to hand it over to the next generation of farmers in better shape than we received it. They asked some really great questions and were genuinely interested in how we farm. We were transparent and open about all aspects of our farm, and I think this helped to plant the seed for the feelings of connection and understanding and camaraderie that developed over the course of the tour.

Introducing ourselves and our farm.

The group also encouraged us to share our impressions on the sustainability of dairy, so we explained how dairy is a hyper-local product. Milk produced by our cows could be consumed at a Starbucks 20km away from the farm. We mentioned the regulations we are held to regarding manure management and how these protect our environment and aquifers. We talked about how manure is a valuable fertilizer, and how we use our farm’s manure to provide nutrition for the crops we grow to feed our cows. It’s one giant circle of sustainability.

At the end of the tour, we were given an opportunity to ask our own questions. And we didn’t hold back. We thanked them for showing interest in dairy farming but explained that we were very confused about the recent news that Starbucks was phasing out dairy. Since Michael Kobori, chief sustainabilty officer had just started his new position at Starbucks a month earlier, he deferred to Hans Melotte, Vice President of Starbucks global supply chain, on this question.

Mr. Melotte began by saying that Starbucks absolutely has not committed to “phasing out” dairy. He referenced Starbucks CEO Kevin Johnson’s letter, where he stated that one of the 5 environmental strategies to be implemented by Starbucks was to “expand plant-based options, migrating toward a more environmentally friendly menu”. (Find the full text here: https://stories.starbucks.com/stories/2020/message-from-starbucks-ceo-kevin-johnson-starbucks-new-sustainability-commitment/)

 

Mr. Melotte reiterated several times that Starbucks will continue to serve dairy products. Starbucks is simply adding more options to their menu AND looking at ways to be more environmentally sustainable.

This visit to dairy farms was part of that initiative to learn about sustainability on dairy farms and how Starbucks can encourage and support sustainability initiatives in the global dairy industry. He stated that dairy is a huge part of Starbucks’ business, and this will continue into the future.

By the time the group left, they felt like old friends. At the debrief session with the tour facilitators the next day, Starbucks tour attendees shared how excited they were to connect and engage with farmers and learn more about dairy farming. They were in awe of all the different hats farmers wear: nutrition specialist, soil expert, animal caretaker, business person, etc, etc. They were impressed to learn how valuable dairy farming is to local economies and how closely connected our farms are to Starbucks coffee shops in our communities. It seems the realization that milk from our farms in all likelihood ends up at one of our local Starbucks shops was pretty impressive to them! The group will continue their learning to better understand dairy, its impacts and opportunities, and how Starbucks might play a role to support the industry and farmers. Every individual was extremely grateful to have been able to meet dairy farmers in person to learn from us and, most importantly, experience the human side of agriculture.

Meeting our cows

We too are so grateful to have had this opportunity to open our farm to Starbucks. We look forward very much to continuing this conversation and building on the relationship we forged on the farm. And in the meantime, we’ll continue to savour our homemade lattes made with freshly ground Starbucks coffee beans and milk from our very own cows. Coffee and real dairy: the best combination. ❤️🥛 ☕️

Myths and Fear: a farmer’s thoughts on promoting Canadian milk

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Remember when Subway announced they were going to start sourcing antibiotic free meat? I was scrolling through my old blog posts the other day and came across a piece I had written then. I had been feeling so discouraged at the animosity that move brought out – between farmers!

Unfortunately, this feeling of competition and rivalry has not abated. In fact, the new trade agreement has seemed to acerbate the divide between farmers – especially between American and Canadian dairy farmers. This is why:

Canadian farmers and consumers’ claims of American cows pumped full of hormones and antibiotics are not accurate. Yes, some American farmers use artificial growth hormones on their dairy cattle to stimulate milk production. However, only a small percentage do — and these accusations that American milk is full of hormones are rather baseless. Additionally, American farms face the same penalties we do should antibiotic residues be found in their milk. We’ve interacted with so many American farmers over the years, farmers who farm because they love their cows, their land, their way of life. Family farmers just like us. We are more alike than we are different; this love for dairy farming should be what pulls us together, not what drives us apart. Yes, a share of our Canadian market has once again been given up to foreign imports by this trade agreement. This trade agreement will do

very little to ease the woes for our neighbours to the south but it WILL have a very real, very negative effect on our Canadian dairy industry. It scares us too! Still, I’ve seen just a few too many posts claiming that American milk is garbage. It’s just not fair to our neighbours to the south who work so hard for so little. I hope we can share our concerns about the impact of this trade deal without resorting to fear mongering about the milk produced by farmers just like us.

Instead, why don’t we encourage Canadian consumers to continue to buy Canadian by sharing the benefits of buying local milk? It benefits our Canadian economy, first of all. It’s produced by Canadians, for Canadians. That’s awesome! Additionally, we are so proud of our national quality, safety, traceability, and animal welfare standard – the ProAction Initiative. This program is extremely comprehensive and ensures that the milk our consumers purchase is top quality and is produced by happy, well cared for cows. That’s definitely something to celebrate!

Let’s put a face on Canadian dairy farming. Instead of sharing articles or social media posts that promote fear based marketing, maybe share a photo of your cows or your farm, and explain how you are so proud to produce food for your fellow citizens. Remember that our neighbours to the south are farmers just like us. They too face the same fears and hardships that we do, probably more so given the dismal milk prices there the past several years. Denigrating the work they do is not the answer here. Will you join us in attempting to stop the spread of fear simply by sharing your love for your farm, your cows, and your work doing what you love best? I think that if this were to happen, we’d all win – farmers (yes, both Canadian and American!) and consumers alike.

If you’d like to read more of our thoughts on farmer rivalry and fear marketing, check out this link:

The Subway Saga: My Thoughts on Marketing and Farmer Rivalry

A Canadian Dairy Farmer’s First Impressions of #USMCA

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Disappointment and worry. That’s what dairy farmers across Canada are feeling this morning.

In case you missed it, a new NAFTA agreement was signed last night. Now called USMCA – The US Mexico Canada Agreement – this new trade deal has given away more access to our dairy market to our foreign trading partners: 3.59% of our market and forcing changes to the way we price certain classes of milk. This access and changes are more significant than what was given away in the last trade agreement – the CPTPP – and therein lies much of the sting.

Our prime minister and negotiators had promised our dairy farmers that they would defend supply management. But this doesn’t look or feel like a defence of our industry, this is another erosion of the stability of our industry and it’s a kick in the teeth to our nation’s dairy farmers. This feels like a death by a thousand cuts. Recent years have seen significant erosion of our market, with domestic milk giving place to foreign imports on our local store shelves. Both CETA and the CPTPP carved out significant chunks of our market. Under the original TPP, the US also had been given additional access to our markets (3.25%) but when Trump pulled the USA out, that access was lost. But rather than standing firm and perhaps offering a smaller percentage based on that fact, our government caved and offered up more to one country than it had given to a collection of foreign interests in both the CETA and CPTPP agreements.

It’s very frustrating. This access will not significantly help American dairy producers who have been overproducing such huge amounts of milk – 3 states alone produce enough excess milk every day to supply all Ontario consumers – that this access to our market will literally be just a drop in the bucket to them and won’t significantly ease their dairy woes. On the other hand, it’s a heavy blow to our Canadian farmers and our industry. Each foreign dairy product on store shelves displaces dairy produced here in Canada, by Canadian farmers for Canadian consumers. This affects Canadian jobs and the livelihood of our farmers and their families. Our farmers have paid for the ability to produce that milk and now another portion of that has just been given away, and for what? To appease Trump and help his re-election chances now that he can claim a win for dairy producing states?

I know that our industry and our farmers will be spending the coming days and weeks determining the impact to our sector. The impact at the farm level remains to be seen but we will be forced to tighten our belts still further, that much is sure.

In the meantime (and I know that this question will be asked frequently in the coming time) our loyal Canadian consumers can continue to support their Canadian farmers by purchasing dairy products labeled with the little blue cow. Your support is always most appreciated, and now will be more important than ever.

Back off, Trump!

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Trade war. Sounds scary. And it is. As a Canadian dairy farmer, my farm and family is directly in the crosshairs in this fight. That cold sick feeling in the pit of our stomachs has returned yet again as we wait to hear what the future holds for us. Will we survive this latest attack on our livelihood? Will scenes like this soon only be a memory in rural Canada?

President Trump’s latest tirade against our country’s dairy supply management system and his demands to dismantle said system are frankly quite frightening. But what is most frustrating is the lack of background or real facts in his claims of unfair trade practices in dairy between the US in Canada.

Supply management means that our Canadian dairy farms produce enough milk for Canadian consumers. In order to keep this balance between demand and supply, our government has trade barriers in place in the form of tariffs on dairy imports. Foreign countries are able to import milk to Canada, but they will be charged a high tariff (up to 300%). This cost is often prohibitive to imports and so Canadian processors usually rely on domestic dairy supply. But… Canada does allow some tariff free imports – about 10%. This percentage has been increasing in recent years; CETA and the new TPP have whittled away a sizeable chunk of our dairy market. But get this: this 10% is more than double the amount that the USA allows. Say what??? Yes, you read that correctly. The US caps tariff free imports at about 2.75%. So, the US ALSO protects their dairy industry. Ironic, huh? Yet, President Trump has attacked our system. You see, American dairy farmers are in dire straits. They produce much much more milk than is needed in the States and export a rather significant percentage to other countries, Canada included. The global dairy market is saturated, there’s simply too much milk. This has driven the price paid to American farmers below the cost of production, pushing many farms out of business. It’s understandable then that Trump would look for ways to alleviate these problems. But expecting entirely free dairy trade with Canada to fix this problem is ludicrous. With a population 1/10th the size of the States’, our market is too small to make a very significant dent in their current surplus. Wisconsin alone produces more milk than all Canadian farms combined. The US needs to manage their own issues with over supply rather than expecting us to fix their problems. Our own farmers do a fine job of supplying our citizens with dairy products, thank you very much.

And if the border were opened, what would be the cost? Our current system ensures a fair price paid to farmers that covers the cost of production. American dairy farms are already producing milk at a loss, and Canadian farms would soon follow suit. Small farms unable to compete with the economies of scale present on mega dairies with tens of thousands of cows would be the first to go. Farms like ours. Family farms. Our rural fabric would be forever changed. Is that what Canadians want?

If you want the dairy products you enjoy to be produced on Canadian farms, under the strictest animal welfare, milk quality and food safety standards in the world, it’s time to speak up. Let your elected officials know that your Canadian dairy products and dairy farmers are important to you. Reach out to your MP. Send an email to the Prime Minister’s office. Do anything you can to encourage our government to stand firm, to not give in to Trump’s bullying tactics. If they don’t, this photo may one day be one of the only reminders of the farms that used to dot our countryside. Let’s work together to make sure that doesn’t happen.

The New and Un-Improved TPP: A Canadian dairy farmer’s perspective

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Disheartening news for the Canadian dairy industry today…

You may recall our repetitive posts about the Trans Pacific Partnership (TPP) trade agreement negotiations 2.5 – 3 years ago. At the conclusion of those negotiations, our government gave up a rather hefty chunk of our dairy market. It was sobering news then, even with the promised renumeration package. When President Trump refused to ratify the trade agreement and pulled the USA out of the agreement altogether, we breathed a collective sigh of relief. The US accounted for 60% of the collective Gross Domestic Product of the countries involved in the trade agreement; it seemed unlikely that the deal would go any further. Still, Canada resumed negotiations with the remaining countries. These negotiations flew slightly under our radar what with the much louder rhetoric surrounding the NAFTA re-negotiations capturing most of our attention and worried speculation.

However, today I was shocked to read a press release from Dairy Farmers of Canada revealing that our government has agreed to give up the same amount of market access concessions as it had previously – when the USA was still a part of the trade deal! In other words, more foreign milk will flow into Canada tarriff free. Our Canadian supply managed system balances supply and demand, and so increased supply from foreign sources will result in our Canadian farmers being forced to decrease production and therefore farm revenue will also fall. Not a pretty picture!

Honestly, I’m upset. With the loss of the largest negotiator calling for increased access to our dairy market, our government should have worked harder to scale back the access granted in the first TPP agreement. Does our government not value the 221 000 jobs that depend on our dairy sector? Our government has reiterated their support for a strong and vibrant dairy industry. This doesn’t look like support to me. It looks more like they’re throwing our country’s hardworking farmers to the wolves.

What will this mean for our country’s dairy industry? Will the compensation package promised with the original TPP concessions still be on the table? Or will our farmers be forced to bear the brunt of yet another blow to one of the pillars integral to the stability of our industry? What will the future look like for our industry, our farm, our family? Will our aspiring little farmers ever realize their dream? If this market concession is any indication of the value our government places on our industry, I shudder to think what the NAFTA negotiations may hold for us. Sobering times, my friends.

https://www.dairyfarmers.ca/news-centre/news/policy/dairy-farmers-of-canada-reacts-to-reports-regarding-the-revised-cptpp-agreement?utm_campaign=DFC18&utm_medium=SP&utm_source=FB&utm_content=lK

Supply Management IV: will new NAFTA be our nemesis? 

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Some of you have been asking for our thoughts on the latest news coming out of the NAFTA negotiations. And honestly? I’ve been too disheartened to even write about it. We’re scared. Scared about our futures, scared about our children’s futures. As relatively new additions to the dairy industry – we’ve been dairying for less than 15 years, only 6.5 years on our own – we carry a massive debt load. That’s all fine and dandy under the stability of our supply management system, and it should be paid off before our children would potentially take over the reins of the family farm. However, should that stability vanish, as the latest US demands for the abolishment of our entire system would entail, our farm would very possibly cease to exist. 

And why? Our system ensures a stable, fair price for farmers. It also has meant that consumers – and we’re consumers too! – have paid a competitive, fair price for dairy products in the grocery stores. It has allowed Canadian farmers to develop a top notch program that ensures that our dairy farms are held to the highest milk quality, food safety, and animal welfare standards in the world. Our system has helped hundreds of young and not-so-young dairymen and women get a leg up into the industry through various provincial new entrant programs. There are so many benefits to our system! Is it perfect? No! But it’s always changing and adapting to new situations. And quite frankly, it’s the best system out there. Around the world, dairy farmers are struggling to make ends meet. In New Zealand, Australia, the UK, Europe, and the USA dairy farmers are exiting the industry in droves, no longer able to keep their farms afloat after sustained low global milk prices. 

So why attack our industry? It doesn’t make sense to me. The world is awash in a glut of milk. Farmers around the world have been producing more and more milk, all just trying to make ends meet. But now there’s a huge over-supply. Canada’s market look mighty attractive; a good place to dump that excess. But that won’t solve the problem! With only 30 million consumers, 10x LESS than the US, our market would quickly be saturated with this foreign milk, and the problem would still be there. Except now, our small Canadian family farms would be forced out of business, unable to compete with the glut of milk pouring over the border at abnormally low prices. Our complete rural fabric would be torn apart. It’s not just the farmers who would suffer; it would be the feed companies, the veterinarians, the dairy supply companies. In short, it would mean large scale devastation of many rural communities. Instead, these governments eyeing up and demanding the end of our system should fix their problems at home. Manage your supply. There’s no need to over-produce; it’s just plain wasteful and it’s detrimental to the global dairy industry. When supply and demand are balanced, we all win: farmers, consumers, governments, and national economies. 

We’ll be watching the next NAFTA negotiation rounds with bated breath. We are most definitely thankful that so far our government has been vocal about their determination to protect supply management, and we hope and pray that these words will be reflected in their actions at the negotiating table. To our supporters: thank you. Thank you for your moral support. And thank you for continuing to support your local dairy farms with your purchasing habits. We wouldn’t be farming and living this dairy life, caring for our cows with dedication without you behind us! 

For now, we continue on. Our kids still follow us around the barns, helping out when they so wish, learning to do by doing. Will this knowledge and these skills ever be put to use one day? Will they ever follow their dreams to be just like mom and dad? I don’t know. Time will tell. 

Supply Management: Good for farmers, good for consumers, good for Canada. Hands off, Bernier!

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Okay friends, we’re coming down to the wire here in the Conservative leadership race. With all of the uproar in the last week with President Trump taking aim at our Canadian dairy industry, we can’t forget that we also have domestic challenges facing our industry. Just this morning, Canadian businessman and Conservative leadership candidate Kevin O’ Leary, one of the polling front-runners in the leadership race, pulled his name from the race and threw his support behind Maxime Bernier. As you know from our previous posts, Maxime Bernier has pledged to end supply management if he is elected leader of the Conservative Party of Canada, and Mr. O’ Leary had admitted that he would use supply management as a bargaining tool in future trade negotiations. Both he and Mr. O’ Leary are leading in the polls, so as you can understand, this bolstering of Bernier’s campaign is rather unsettling.

Supply management keeps Canadian dairy, poultry and egg farms vibrant, viable, and an integral part of our national fabric, from both a social and economic perspective. Without supply management and our border tarriffs, our family farms would have a very hard time competing with the glut of excess milk currently flooding the world dairy market. We know that our system that ensures a fair return for farmers is the envy of dairy farmers around the world, and we personally have received many messages from farmers south of the Canadian – US border who long for a system like ours that would allow their farms to remain viable in this turbulent time for the dairy market.

So the benefits for farmers are obvious, but what about for our consumers? Mr. Bernier alleges that if supply management were scrapped, consumers would pay much less for their dairy; he’s even claimed that Canadian consumers pay twice the amount they should pay for their dairy products. Unfortunately, Mr. Bernier does not have his facts straight. Check out the photos I’ve posted below.

 

 

 

 

 

 

Both research from an accredited research firm and very current anecdotal evidence from a fellow dairy farmer doing her own research prove that Canadians pay a very competitive price for their eggs and dairy. In fact, if we compare apples to apples, Canadian pay LESS for dairy compared to the same dairy products in the US (all Canadian milk is produced without the use of artificial growth hormones). Now, Mr. Bernier, either you’ve been misinformed, or you’re deliberately trying to garner support from unsuspecting Canadians by quoting “alternative facts”.  Judging by the number of times dairy farmers and industry representatives have presented the correct information to you, I’m leaning towards the latter assumption. That doesn’t say much for your integrity, and, in my opinion, throws your entire campaign and character into question. Definitely not the type of individual I want to see at the helm of the Conservative party or – if the Conservatives are re-elected in 2019 – leading our country.

Friends, let’s get the word out! We’re not only facing threats to our family farms from south of the border, we have a very real challenge right here at home too. If you want to enjoy the stable, competitive dairy prices that are the current reality, produced right here in Canada according to the highest safety, quality and animal welfare standards in the world — all the while benefitting family farms and rural economies across our country, speak up! Canadians need to understand that a vote for Bernier is a vote against food sovereignty, against family farms, and against the very fabric of our rural communities. Your help in sharing this message is appreciated.

Devastating News for our Friends to the South — and our response.

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I’m a proud Canadian. I’m also a dairy farmer. I farm with my family, and our kids dream of farming themselves one day. I have dairy farming friends all around the world, many in the USA. Borders do not seem to matter to friendships; we’ve shared experiences and information, and celebrated successes and achievements with each other, irrespective of which side of the 49th parallel our farms are located. It’s understandable, then, that we hate to see our farming friends hurting and scared. You see, there’s been some very scary developments in the US dairy industry, specifically in Wisconsin. We’ve read with shock and dismay of the 75 farms that were dropped by their processor with just one month’s notice to find a new home for the milk that their cows produce. These are farmers with families, with bills to pay, with dreams and hopes for the future – just like their dairy farming compatriots across America and also up here in Canada. They also dream of seeing their children take up dairy farming in the future, but they now face the very real prospect of those dreams never becoming a reality. Their hurt is our hurt because we can understand just how painful this experience must be.

Farming is not just a job, it’s a lifestyle. It’s a lifestyle that we pour our whole selves into; our farms and our cows and our land are our life, our heartbeat, our hope for the future.

Seeing these dreams dashed and hopes destroyed is devastating, regardless of your nationality.

 

Allow me to briefly explain this issues at hand that have resulted in this situation. For years, several processors in the USA have exploited a loop hole in the trade regulations that control dairy imports into Canada. They’ve shipped a product called ultra- or dia-filtered milk north to Canadian cheese plants. Classified as an ingredient at the border, this product was able to pass our border controls tariff-free. However, once the product arrived at the processing plant, the classification was changed to dairy in order to be permitted for use under the Canadian cheese standards, which regulate which percentage of cheese ingredients must come from milk. This situation was causing our Canadian processors to forego using Canadian milk for their cheese, and sourcing the cheaper US diafiltered milk, reconstituting it, and using it in the cheese and other dairy products. As you can understand, this resulted in a loss to Canadian dairy farmers as our milk was no longer being used in this cheese – and it was no small sum either, some pin it at over $230 million annually! Over the past few years, our provincial and federal milk boards and committees have worked hard to create a way to encourage our processors to resume using Canadian milk. We’ve created a new class of milk that is priced at the world milk price. Now that our milk is financially competitive, several processors have dropped the American product and are sourcing all Canadian milk. We have not, as some sources claim, added import tariffs to the American ultra-filtered milk, we’ve simply made our milk the same price. Again, to repeat, no new tariffs have been created that would restrict USA access to the Canadian market. Canadian businesses have the right to choose their suppliers, just like American companies do. Business decisions may also be influenced by the fact that the American dollar, when it is high like it is now, makes it more expensive for Canadian businesses to buy American. This new pricing mechanism was adopted in Ontario last year, with the rest of Canada following suit several months later. US processors knew of our plans. It was no secret; there were several news sources on both sides of the border reporting on our efforts. Now that Canadian processors have resumed sourcing Canadian milk products for cheese, these American processors are left with unwanted filtered milk, and that has resulted in this terrible situation for those farmers. As many American farmers have accurately pointed out, the problem is not Canada’s dairy industry; the problem is the excess milk on the world market. The US needs to manage their excess dairy production more efficiently to prevent surpluses and this type of waste.

 

At this time, I’m incredibly grateful for our supply management system. With our system, if demand for milk falls, all producer quotas are reduced; individual farms are not dropped by processors. In my opinion, it’s a fair system that offers stability to farmers; stability that is necessary for innovation, growth, and the sustainability of the industry. I’ve read various comments from American farmers lamenting that fact that there is no such system in the US.

 

In my opinion, it’s not fair to blame Canadian dairy farmers or our supply management system for looking out for our own industry and attempting to regain the share of the market that once was ours.   I’m sure it should be obvious that this is not a time to point fingers or to adopt an “us vs them” mentality. At the same time, while our hearts go out to the farmers affected, we also need to look to our own farms and realize that we too need to make a living and ensure that our Canadian dairy industry remains viable.  I don’t claim to have answers or solutions to this problem. But I know that right now, those farmers dropped by their processors don’t need blame or acrimony, they need support and understanding and sympathy. They need help to find a new home for their milk, and I hope with all my heart that they will find a way to continue shipping milk and caring for their animals, land, and families.

 

Vote! The future of Canada’s dairy farms may depend on your choice!

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Hello friends.

In just over two months, members of the Conservative Party of Canada will choose their new leader. By applying for a Conservative party membership by next Tuesday, March 28, you too can have a say in who becomes the next leader of the Official Opposition. Rona Ambrose has done a great job at the helm as interim leader but now it’s time to vote for the new long term voice and face of the party.

As dairy farmers, we’re watching this leadership competition unfold VERY closely. You see, all of the political parties in Canada have historically been supportive of the dairy and poultry industries’ current method of matching consumer demand with a supply of fresh milk, poultry, and eggs. Our system, called supply management, effectively protects our Canadian dairy sector’s vibrancy, viability, and important contributions to the Canadian economy while providing consumers with top-quality, safe, plentiful, and appropriately priced dairy products.

A few years ago, I shared the following description of our system in my first blog post about supply management: “In the 1960s and early 1970s, the Canadian government and Canadian dairy farmers came to the conclusion that production discipline – balancing supply and demand for milk products – was necessary to avoid extreme market fluctuations. Both the federal and provincial governments worked together with farmers to implement a system that is adjusted to suit the needs of Canadian demand for dairy. The system is administered by the Canadian Dairy Commission, which measures the demand for milk and sets the production limits accordingly. Plain white milk as well as any other dairy product labeled as Canadian is solely produced by Canadian dairy farmers for Canadian consumers. Milk is a local product, supporting local economies across our nation. The share of the market that each farm owns is called quota. Quota grants the farm a right to produce milk. The provincial quota is adjusted according to demand, and is increased or decreased as needed. Overproduction and waste are avoided because production is directly synchronized with consumer demand. Dairy farmers are paid a standard price for the milk they produce. This price is set by the Canadian Dairy Commission and is the result of a yearly national study of the cost of producing milk at the farm. Dairy farmers are paid the cost of producing the milk they ship to the processor.”

But with the prospect of a new leader for the party in official opposition to the governing Liberal Party of Canada, all of this could be in jeopardy. The two front runners in the race to become the new leader of the Conservative Party are no friends of supply management. In fact, one of the candidates, Maxime Bernier, has based nearly his entire platform on the premise that, if elected, he will do his utmost to dismantle this very system of stability, strength, and self-reliance that allows family farms across Canada to prosper. The other front runner, Kevin O’Leary, has oft times allowed his bias against supply management to show. Although he now professes that he supports supply management, he has also said that he will use supply management as a negotiation chip in any future trade deals. You can’t have it both ways, in my opinion!

The most infuriating part of all of this, however, are the half-truths and myths on which these candidates base their opinions. For example, they claim that consumers suffer as a result of supply management, claiming that Canadian consumers pay double the market rate for dairy products. Let’s take a look at that for a moment by comparing the prices in Canadian grocery stores to those south of us in the USA.

Screenshot 2017-03-21 15.04.16

Compiled by Nielson, this graph is a weighted average over one entire year of milk sales in a select number of countries with which Nielson has contracts. It’s a very accurate picture because of the sheer size of the study, taking into account purchasing habits and the length of time studied.

Well, would you look at that!

To compare apples to apples, we must compare the price of “hormone free” milk in the US to Canadian milk, as all milk in Canada is artificial-growth-hormone free. I’m sorry, but do you see what I see? It appears that Canadian consumers pay LESS than our neighbours to the south! Huh! Who would have thought that this would be the case considering the rhetoric spewing from the anti-supply-management camps!

As further evidence to these facts, check out this comment from a friend of mine who recently visited Florida with her children. This is what she had to say:

“US $4 for a gallon of partly skimmed milk (3.79L, not 4L like up here in Canada) while I’m used to buying 4 L for $4.29 Canadian.”

Figure in the current exchange rate, and you’re paying over $6.65 for less milk. Interesting!

Mr. Bernier also claims that the price of milk in the stores would drop if supply management were abolished. Just take a look at the price of milk in New Zealand. They abolished supply management, but the retail price of milk is higher than in Canada AND farmers are paid much less. Just last year many farmers were forced to exit the industry when the farm gate price dropped far below the cost of producing their milk. Do we want to see our family run dairy farms disappear from our nation’s landscape? If Canada were to dismantle supply management, our family farms would be a thing of the past as large conglomerates would swoop in to take over those bucolic farms dotting our countryside from coast to coast.

Critics of supply management often say that our system stifles innovation. I’d beg to differ. Every year we take part in a tour of the newly built farms in our small part of the province. There usually are 10 farms on the tour, and the technology and innovation is staggering. Robotic milking equipment, robotic feeding equipment and the latest equipment in animal welfare advances, to name just a few.  Family farms are able to invest in these sort of technological marvels just BECAUSE of the stability that supply management offers. Take a look at the graphic below. Canadian farm gate price for milk is stable, and sufficiently covers the cost of production, which allows for investment capital for these projects. This stability means that the banks are confident in our farms, and we are able to borrow the money to fund these innovative additions to our farms. Our farms are well maintained, in good repair, and feature the latest equipment and tools to provide the best care for our cows.

Screenshot 2017-03-21 15.04.52

It should now be quite obvious to you that critics of supply management are basing their opinion of our system on faulty information. But these critics refuse to listen to the voices of Canada’s dairy farmers. We’re facing a very real, very immediate problem. If an anti-supply management candidate is elected in this leadership race, we could stand to lose much of our support in Ottawa if the voice of the official opposition does not hold the governing Liberals’ feet to the fire when or if our system comes under attack during trade negotiations and the like. And I shudder to think of what could happen should the Conservatives be re-elected in 2019 and either of these candidates would become Prime Minister. Not an ideal situation in the least!

Now that you understand the threats facing our family farms, would you be interested in helping to keep our system intact and benefiting both consumers and farmers? Here’s what you can do: Become a member of the Conservative Party of Canada by March 28, 2017. Membership is open to all citizens and permanent residents of Canada above 14 years of age, provided they are not a member of another political party. A one year membership is just $15 and allows you to vote in this coming leadership election to be held on May 27. We, along with our fellow Canadian dairy farmers will be watching the race with interest, and will in all likelihood be in communication with one another about which candidate we feel will best benefit all of Canada, dairy farmers included. Due to the way this vote will be structured, it will be important for all dairy farmers to vote as a block in order for our votes to be of any influence in the outcome. We have a few more weeks to decide who this candidate will be. I’m curious to hear from candidates, their staff, and other interested parties about who they think will be the best person to man the helm of the Conservative Party of Canada going forward.

Until next time,

Julaine, a Canadian dairy farmer.