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: 326

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

Update on AAFC Staffing Reductions and Canola Research

Agriculture and Agri-Food Canada (AAFC)’s decision to close multiple research stations and reduce staff across the country is alarming. Consultation is urgently needed so research funders understand the impacts of the cuts, explore alternatives where needed, and identify paths forward. AAFC researchers and facilities are world-class, and they have played a crucial role in advancing canola production for Canadian farmers. Alberta Canola, Manitoba Canola Growers and SaskOilseeds expresses our heartfelt gratitude to the AAFC researchers, technicians, and other supporting staff who have contributed to growth and profitability of the canola sector in Canada. Canadian farmers have earned Canada’s place as a leading oilseed supplier, with canola contributing billions to the Canadian economy; these government cuts raise serious questions about the support needed to sustain that success. Canola growers invest millions of dollars per year in research projects, many of which are being led and

Joint Letter on the Closure of Federal Agricultural Research Centres

We are writing to express our deep disappointment with Agriculture and Agri-Food Canada’s recent decision to close three federal research and development centres and four satellite research farms across Canada, including the research and development centre in Lacombe, Alberta. Research and development are critical to advancing industries and economies by addressing current challenges and building resilience for the future and has played a vital role in growing agricultural exports to $100.3 billion in 2024 (AAFC, 2025). In the context of today’s global environment and declining productivity for Canadian agriculture, it is more important than ever to support domestic research capacity to ensure Canada remains a leader in agriculture for years to come. Public investment in agricultural research has historically delivered some of the highest economic returns of any government expenditure. Independent studies consistently demonstrate that agricultural research and development generates st

Alberta Canola Announces Board Leadership After 36th AGM

Alberta Canola Producers Commission held its 36th Annual General Meeting (AGM) on Tuesday, January 27, 2026, during the CrossRoads Crop Conference in Edmonton. Following the AGM, the Board re-elected Andre Harpe of Valhalla Centre, as Chair and elected Christine McKee of Stirling as Vice Chair. Harpe also recognized and thanked outgoing directors Christi Friesen and Paula Law for their dedicated service. Friesen represented growers in Region 1, bringing energy, thoughtful perspective, and a strong commitment to collaboration. Law served growers in Region 7 and was a respected voice on the Board, known for her leadership, vision, and steady focus on the best interests of Alberta’s canola growers. The Board also welcomed Chris Kamphuis of Worsley as the new director for Region 1 and Jason Lenz of Bentley as the new director for Region 7.

Canadian Olympic ties to ag

From athletes to officials, Canada’s ag sector will be represented in Italy

Nutrien Names Chris Reynolds Global Sales Leader

Nutrien has named Chris Reynolds as EVP Global Sales to unite sales teams worldwide improve efficiency and strengthen customer value as part of a planned leadership transition.

© 2026   Created by Darren Marsland.   Powered by

Badges  |  Report an Issue  |  Terms of Service