Ontario Agriculture

The network for agriculture in Ontario, Canada

Future of Dairy Farming = Efficiency

Dairy farmers can sometimes get a bad reputation. Because of supply management, I'd agree that some farms can hang on longer than they would if they were open to the free market. The free market can be very good and eliminating the least efficient very quickly. Unfortunately - it can also eliminate some good farmers who just get mixed up in a market they can't control (just ask a hog farmer).

However - I think those least efficient dairy farmers are going to have to make improvements quickly or face some tough choices. In the recent dairy management school I took part in (if you missed me talking about that - click here), we got a chance to talk policy and economics with George McNaughton of the Dairy Farmers of Ontario. Right now, they are looking at having to make price reductions because a number of products are about to flood the market thanks to a low world dairy price and high Canadian dollar. Essentially what that means is that a combination of price and currency means processors in Canada can pay for the product as well as the import tariff, and get it cheaper than they can buy from local producers. (As a side note - can you guess which country poses the biggest threat? It is not the US. It is New Zealand) That means dairy farmers have only two choices. Sell at the cheaper price in order to compete, or dump the milk. It's not hard to figure out which one is more viable.

This isn't the first time dairy farmers have had to sell their milk for a lower price than what was set by the Canadian Dairy Commission, however it has only lasted a few weeks before the loonie cooled off, or world prices started to rise. However, talking with economists has me feeling that lower dairy prices could be sticking around longer than normal. Just take a look at TD's latest dollar outlook. It is pegging the loonie to sit between 1.02 and 1.05 for the next year.

I'm supportive of what the DFO is doing - even though they really don't have much of a choice here. All we as farmers can do is make sure the cows are milking as well as they can, and we make sure expenses are as low as they can be.

And how knows, maybe a lower price will result in a bit more demand - and a bit more quota for farmers to fill.

Do you agree? Or maybe have a different opinion on this altogether? Let me know in the comment section.

Views: 320

Comment

You need to be a member of Ontario Agriculture to add comments!

Join Ontario Agriculture

Comment by Wayne Black on May 22, 2010 at 4:58am
A lower price may not increase demand significantly. But it will eliminate many inefficient producers. It also would lower the price of certain 'barriers to entry' (land & quota costs). This may encourage beginning farmers or smaller producers back into the dairy sector - not for the money but for the love of taking care of the livestock. On the flip side, it may encourage remaining producers to get larger to gain better 'economies of scale'. A 1000 hd herd would become more common.

Agriculture Headlines from Farms.com Canada East News - click on title for full story

Ag in the House: Dec. 1 – 5

A Liberal minister reminded the House the carbon tax doesn’t apply to farmer

Ontario Animal Health Network (OAHN) Swine Network Quarterly Industry Report

Starting in 2015, Senecavirus A (SVA) has caused intermittent complications with respect to the export of Canadian cull animals to the United States. This disease resembles reportable swine vesicular diseases. This is a national issue and since June 2025 has impacted Ontario cull sow movements. In July 2025, the APHIS and the USDA removed the export eligibility status for a cull sow assembly in Ontario due to SVA lesions being seen in cull sows sent to a USDA processing facility. These lesions initiated foreign animal disease investigations at this US processing plant. The suspect animal(s) were initially quarantined for individual inspection and further testing. Since the initial site, another 2 Ontario cull sow assembly sites have also had their export eligibility status revoked by APHIS and the USDA for similar reasons. The affected assembly sites accept cull sows from Quebec, the Maritimes and Ontario. Each affected assembly site must action the USDA requirements including emptyin

New restrictions placed on hunting, farming 'incredibly destructive' wild boars in Alberta

Wild boars have been declared "a pest in all circumstances" by the Alberta government effective Dec. 1, meaning new restrictions have been placed on keeping them in captivity and hunting them in the wild. It is now illegal to keep, buy, sell, obtain or transport wild boars in Alberta without a permit. That also means no new wild boar farms will be permitted in the province. The hunting and trapping of wild boars in Alberta is banned as well, with the exception of land owners or occupants killing the animals on their own land. Any person who kills a wild boar is now required to report the date, location and number of boars killed to the province as soon as possible. Hannah McKenzie, the province's wild boar specialist, says the changes were made due to the dangers posed by existing wild boar populations and the risks associated with more escaping from captivity. "In addition to damaging agriculture and the environment, wild boar pose a serious risk for the introduction and spread of

CUSMA Review Raises Concerns Over Potential U.S. Tariffs on Canadian Pork

As the first formal review of the Canada-United States-Mexico Agreement (CUSMA) approaches in July, pork producers across North America are bracing for potential impacts—especially the possibility of new U.S. tariffs on Canadian agriculture. Florian Possberg, Partner at Polar Pork Farms, says the U.S. political landscape is shaping expectations. He notes that U.S. President Donald Trump has repeatedly pushed for a baseline 15% tariff on foreign goods in recent global trade discussions. If that approach carries into the CUSMA renegotiation, it could disrupt one of the pork sector’s most critical trade corridors. Free Trade Has Been Essential for Pork Movement Possberg emphasizes that under CUSMA, both live hogs and processed pork products have flowed freely across borders without tariffs. This freedom is especially important given the highly integrated nature of North America’s pork supply chain. The best-case scenario, he adds, is that tariff-free access continues unchanged. The wor

FCC report highlights productivity as key to Canada’s agricultural future

Canadian farmers could see significant income gains and new opportunities if agricultural productivity growth returns to historic highs. The Farm Credit Canada (FCC) report titled Reigniting agricultural productivity in Canada, estimates that boosting productivity growth to two per cent annually could unlock $30 billion in additional farm income, generate $31 billion in GDP, and create nearly 23,000 jobs across the country. Canada has long been a standout among global food producers. Over the past half-century, the agriculture industry has achieved significant productivity growth through better farm management, improved input efficiency and technological innovation. The report warns, however, that productivity growth has slowed in recent years, threatening the industry’s competitiveness and Canada’s ability to meet growing national and global food demand. “Canada’s agricultural productivity growth has consistently outpaced other G7 countries for more than three decades, showing the s

© 2025   Created by Darren Marsland.   Powered by

Badges  |  Report an Issue  |  Terms of Service