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

Dry Ontario Weather Dents Canadian Corn, Soy Output

Canada’s final 2025 corn and soybean production numbers are in, and both crops finished the year noticeably weaker than Statistics Canada had projected in September. Drier late-season conditions in Eastern Canada reduced yields, pushing corn and soybean totals below earlier expectations and under last year’s levels, Statistics Canada’s survey crop production report on Thursday showed. Nationwide corn production has slipped to 14.867 million tonnes, down from StatsCan’s model-based September estimate of 15.5 million tonnes and 3.1% below last year’s crop. Yields were the key factor, falling to 162.2 bu/acre, below September’s 165.3 bu/acre forecast and down from 168.1 bu/acre in 2024. Harvested area grew slightly to 3.6 million acres, but not enough to counter the yield losses. Soybean output dropped to 6.793 million tonnes, below September’s 7.133 million-tonne forecast and 10.2% below 2024 levels. Yields slipped to 43.5 bu/acre, below September’s 45.7 bu forecast and down from

Celebrate Farm Transition Appreciation Day on January 8, 2026

Farm Management Canada, together with partners across Canada’s agricultural community, is proud to announce that Farm Transition Appreciation Day (FTADay) will take place on Thursday January 8, 2026. FTADay is a national initiative designed to encourage and celebrate the progress Canada’s farmers are making to secure the future of farming through farm transition planning. It has created a groundswell movement to motivate farmers to start, restart, and keep going on their farm transition journey, farmers, advisors, agricultural organizations, and industry leaders are invited to share stories and advice through a national campaign using social media, agricultural media and hosting learning events across Canada to encourage Canada’s farmers. This year’s theme, The Future is Now, highlights the importance of taking proactive steps today to strengthen the resilience, continuity, and long-term sustainability of Canada’s farming community. “The New Year is the perfect time to reflect on and

Dairy Farmers Of Ontario Brings Holiday Magic To Children's Hospitals With Annual Holiday Donation And Heartwarming Milk And Cookies Pop-up

This season, in the spirit of spreading holiday magic and supporting our communities, Dairy Farmers of Ontario (DFO) will make a donation of $500,000 to The Hospital for Sick Children (SickKids) and other Ontario children's hospitals in Hamilton (McMaster Children's Hospitals), London (Children's Hospital) and Ottawa (CHEO). Since 2019, DFO's cumulative donation of $3.6M supports the highest-priority needs across the hospitals and initiatives for patients and families spending the holidays in Ontario children's hospitals. Beyond the donation and inspired by the tradition of milk & cookies for Santa, Dairy Farmers of Ontario is inviting Ontarians to rally around patients in Ontario children's hospitals. The ritual of leaving out milk and cookies for Santa on Christmas Eve sparks holiday magic and joy. However, for children spending the holidays in hospitals, they worry that Santa won't know where to find them. So, to let these kids know we are all thinking of them, DFO's annual Milk &

Worst bird-flu season in years hits Alberta’s poultry farmers

Alberta’s poultry producers are working through the worst avian flu season in years. Scott Olson has been through it twice before. The Wetaskiwin-area turkey farmer lost his 10,000-bird flock in the spring of 2022, when the wild geese migration passed over, then again when they returned in the fall.  Now he is dealing with his third outbreak and third cull. Olson is again pressure-washing his two large barns — disinfecting them as he awaits an inspection — and preparing to restart a recertified operation after Christmas with new hatchlings.  “It’s such a bad disease,” said Olson, also a director with Alberta Turkey Producers.  “We work with a stamp-out policy, essentially so we’re not affecting our neighbours … It’s like a fire: you’re just trying to put the fire out.” Olson’s was one of 11 commercial poultry farms in Alberta under the direction of the Canadian Food Inspection Agency as active quarantine and containment zones as of Nov. 30.  There were six in all of 2024 in Alb

Collège Boréal tackles crop-damaging fruit fly in Ontario

Researchers at Collège Boréal in Sudbury have declared war on an invasive fruit fly that could threaten fruit crops in northeastern Ontario. Morel Kotomale, an associate researcher in agricultural research, and Jean Pierre Kapongo, a professor in Collège Boréal’s agriculture programs, are leading a two-year project to find new ways of combatting the spotting wing drosophila, an invasive fruit fly. The insect attacks most temperate-climate fruits, including cherries, blueberries, raspberries, and strawberries, the college noted. It was first detected in British Columbia in 2009 and had spread to most fruit-growing regions by 2010. Crop losses can range between 20 per cent and 100 per cent of yields, representing an estimated annual value of $6.8 million. Boréal will be aided in its efforts with $150,000 from the Ontario Agri-food Research Initiative, which Research and Innovation Boréal, the college's applied research arm, announced Nov. 28. “Thanks to the growing expertise of our

© 2025   Created by Darren Marsland.   Powered by

Badges  |  Report an Issue  |  Terms of Service