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

Andrew Coyne: Canada’s Productivity Crisis is Now a National Security Issue

At the CrossRoads Crop Conference, the Globe and Mail columnist said slowing growth, aging demographics, and weak competition leave Canada dangerously exposed in an era of economic coercion. Andrew Coyne didn’t open with small talk. Speaking today at the CrossRoads Crop Conference in Edmonton, the Globe and Mail columnist said Canada is facing the “most serious economic and security crisis” of his lifetime — one that combines long-running domestic weaknesses with a rapidly shifting global order. Coyne framed the moment as a collision between two trends: Canada’s slowing economic growth and aging population, and a world where trade and security commitments are less reliable than Canadians have assumed. In that environment, he argued, Canada’s historic advantage — living next to the world’s largest economy and military — can quickly become a vulnerability. A foundational assumption is cracking Coyne’s core message was that Canada has built decades of policy — economic, fiscal, defence

Building a Herd That Works: EPDs, Genomics and Smart Genetic Investments

Julia and Robert operate a commercial cow-calf operation with a strong focus on making informed, strategic management and breeding decisions. They market all calves at weaning and have a goal to increase weaning weights by 20 pounds without sacrificing calving ease, which remains a key priority for both cow health and labour requirements. This year, they are looking to purchase one or two new herd sires. One afternoon at the kitchen table, coffee in hand, they were flipping through the latest bull sale catalogues full of glossy photos when they heard footsteps on the front porch. It was their trusted neighbour and fellow commercial cow-calf producer, Andy. “Bull shopping?” Andy commented when he saw the catalogues. “Trying to,” Julia replied with a puzzled glance, tapping a page covered in circled bull images. “Mind if I take a look?” asked Andy. Julia slid the catalogue over. “Sure. See what you think of our selections so far.” Andy was silent for a moment as he flipped through

Canola and Biofuels: Share Your Perspective

Canola oil is an excellent feedstock for biofuel production, offering farmers an additional domestic market opportunity for their canola crop. The national and provincial canola grower associations have come together to deepen our understanding of canola farmers’ views and knowledge about the connections between canola and biofuels. We’re interested in learning how farmers see the opportunities and challenges related to this growing market. Your feedback will help our organizations better inform policy discussions and strengthen our engagement with you. The survey takes about five minutes to complete, and all responses are anonymous. There are no right or wrong answers – we simply want to hear your perspective. Thank you for your participation! This survey is conducted in partnership with Canadian Canola Growers Association, BC Grain Producers, Alberta Canola, SaskOilseeds, Manitoba Canola Growers Association, and Ontario Canola Growers Association.

AAFC cuts hitting seven research sites

Canada’s ag sector is expressing concern over the full scope of cuts coming to Agriculture and Agri-Food Canada

Ag included in PM’s affordability measures

Producers can fully write off some greenhouses

© 2026   Created by Darren Marsland.   Powered by

Badges  |  Report an Issue  |  Terms of Service