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: 325

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

Nearly $10 million allocated to crop research

Crop research is receiving a total of $9.7 million in funding from the federal and provincial governments. Of the $9.7 million, $7.2 million is through the Agriculture Development Fund (ADF) to support 39 research projects and $2.5 million through the Strategic Research Initiative (SRI) to study the long-term management of herbicide resistant kochia and wild oats. Provincial Agriculture Minister David Marit was at the Western Development Museum, where the Sask Crops Forum is being held, to make the announcement Tuesday morning. "First and foremost, I really got to thank the ADF board, the committee. They go through a lot of projects, probably two or three hundred, and they weed it down to ones that are really important to the farmers and ranchers here in the Province of Saskatchewan," Marit told reporters. "And when you look at the list of the projects that they have approved, it's really some good work. I mean, the one that we just announced obviously for kochia and wild oats is go

Saskatchewan Ag Hall of Fame honours farm-to-table advocate

Farm-to-table advocate Joe Kleinsasser headlines the 2026 Saskatchewan Agricultural Hall of Fame class, recognized for more than two decades of consumer education and leadership in agriculture. Six inductees were announced Tuesday, Jan. 13, during the 48th Western Canada Production Show at the NuFarm Information Theatre in Hall B of Prairieland Park. Kleinsasser, whose family is a member of the Hutterite Colony in Rosetown, was honoured for more than two decades of advocacy educating consumers about the farm-to-table journey of food production — from producers and processors to grocery stores, markets and meals served at home. He said he felt honoured to be included in the provincial Ag Hall of Fame. Other 2026 inductees are Cecil Werner, Terry Baker, Norbert Beaujot, Mary McKay Lindsay and Mark Picard. Lindsay and Picard are inducted posthumously. Kleinsasser served for seven years on the Sask Pork board beginning in 2002 and was also SPI Marketing Group’s director from 1999 to 20

Sask Wheat commits over $2.1 million to wheat research and strategic initiatives

The Saskatchewan Wheat Development Commission (Sask Wheat) has committed over $2.1 million supporting 12 research projects funded under the Saskatchewan Agriculture Development Fund (ADF) and one Strategic Research Initiative (SRI) project in 2026. The Honourable David Marit, Minster of Agriculture, announced the funding of all crop-related ADF projects funded through the Sustainable Canadian Agricultural Partnership (Sustainable CAP) at the Saskatchewan Crops Forum today. “Today’s funding announcement signals to producers that we have strong partners with federal and provincial governments to tackle agricultural challenges and continue to unlock our potential,” said outgoing Sask Wheat board chair Jake Leguee. Sask Wheat’s funding includes projects identified through the ADF intake process and funded by Sask Wheat in partnership with ADF and/or with other Prairie crop commissions. The approved projects include harnessing genetic resistance and cold plasma for management of bacterial

New program supports Canadian farmers with succession planning

A new program is available to help Canadian farm families on their succession plan journeys

Syngenta brings Elatus Era fungicide to lentil growers

The product protects against anthracnose, white mould, and Ascochyta blight

© 2026   Created by Darren Marsland.   Powered by

Badges  |  Report an Issue  |  Terms of Service