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: 322

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

Three Agricultural and Food Sciences profs recognized with emeriti title

Three retired faculty members were named professors emeriti in 2025 for their distinguished service to the University of Manitoba: Dr. Harold Aukema, Dr. Ying Chen and Dr. Qiang Zhang. The title is one of the University’s highest honours. Individuals are selected on their distinguished service to teaching, research, creative and scholarly works and service. Each of the awardees contributed to the Faculty and UM throughout their accomplished research and academic careers. Their nominations read: Harold Aukema, Food and Human Nutritional Sciences A dedicated faculty member for 26 years, Dr. Harold Aukema has made transformative contributions to nutritional science, becoming a global leader in the study of diet and fatty acid metabolites, known as oxylipins. His pioneering research has advanced understanding of dietary interventions for kidney health, directly shaping national and international dietary recommendations for polycystic kidney disease. He has published more than 150 peer-

Grow Canada: Strengthening our Voice, Sharpening our Tools

Grow Canada took place in Calgary, AB, December 2-4. It captured the best ideas from a sharp lineup of speakers and panellists, and built the kind of connections that turn good ideas into action. Connecting farmers, dietitians, industry and content creators, it connects everyone to talk about our agriculture industry and discuss the challenges it faces. The main themes were advocacy, artificial intelligence (AI) and inflation. Canadian agriculture is an economic engine that drives jobs, exports and innovation. Our story lands when we tell it consistently. That means increasing our lobbying efforts, showing up with data and farm-level examples, and making the economic case for stable rules, competitive infrastructure, and market access. Advocacy isn’t a side project; it’s risk management for our next decade. AI is like a wrench in the toolbox; useful when pointed at the right bolts. For best results, we need to be repetitive, rules-based, have documents prepared, regulatory submission

Stock Talks connect producers, municipal officials

When Curtis Vander Heyden of Picture Butte’s Grandview Cattle Feeders Ltd. attended Lethbridge County’s Stock Talks in October, he was prepared to discuss some of the challenges his family’s operation faces but did not expect immediate action. “I did attend the Lethbridge County Stock Talks and it led to the operations manager Ryan Thomson, reaching out and coming to one of my locations for a ‘one-on-one’ so we could both air our frustrations about the past management of the road infrastructure and elaborate on what we could change and work together on,” Vander Heyden says. He appreciated the opportunity to meet with a municipal official for a boots on the ground interaction. “It was the first time in recollected memory that anyone from the County of Lethbridge not only took the time, but actually asked for continued input,” Vander Heyden says. Indeed, the Stock Talks he attended provided an organized and moderated environment to have meaningful two-way discussions with municipal o

Province of Manitoba Commits Second Round of Funding for Gate

Cereals Canada today announced that it has received an additional $10.5 million in funding support from the Province of Manitoba for the Global Agriculture Technology Exchange (Gate). This investment brings the total pledged by the Province to $23.5 million. “I would like to thank the Province for its continued support of Gate, and Premier Wab Kinew for championing this project over the last nine months,” said Dean Dias, CEO of Cereals Canada. “Today’s announcement puts us another step closer to getting shovels in the ground at a critical time for Canadian agriculture.” Gate is a new $102-million, state-of-the-art facility being developed by Cereals Canada in downtown Winnipeg, Manitoba. It is envisioned as a world-class hub for research, training, and international collaboration to ensure the long-term competitiveness of Canada’s cereals industry. “A strong Manitoba economy depends on helping our agricultural producers reach new markets,” said Manitoba Agriculture Minister Ron Kost

Saskatchewan Exports Continue to Support Food and Energy Security Worldwide

Today the Ministry of Trade and Export Development provided data on Saskatchewan's global exports. Despite a challenging year, where international trade disputes, tariffs and geopolitical events have disrupted trade to traditional markets, Saskatchewan exports are making their way to different markets across the globe. "Saskatchewan products are being sent to over 160 countries, helping to ensure food and energy security for billions of people," Trade and Export Development Minister Warren Kaeding said. "Saskatchewan exports, and the value of those exports continues to grow. Here at home these exports are essential for creating jobs and providing services and infrastructure that ensure the great quality of life for the people of Saskatchewan."  Highlights include: In the first nine months of 2025, one of the top destinations for Saskatchewan products in South America was Brazil, where exports totaled $1.3 billion dollars, primarily in potash.  Exports to Japan have grown considerabl

© 2025   Created by Darren Marsland.   Powered by

Badges  |  Report an Issue  |  Terms of Service