Ontario Agriculture

The network for agriculture in Ontario, Canada

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: 289

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

WPX 2024: Vantek offers products that can withstand the harsh pig barn environment

Paul Vanberg, founder of Vantek Concrete Restoration and Protection, and Ryan Albright, Product Manager at Vantek Concrete Restoration and Protection, recently spoke to The Pig Site’s Sarah Mikesell at World Pork Expo in Des Moines, Iowa, USA. Paul, tell me a little bit about Vantek’s product offerings and what you are showcasing at World Pork Expo? The most important thing that I have learned over the 40 years in this industry is that the pig environment is a really tough one. People do not understand how difficult it is to maintain equipment and concrete products and protect their investment in buildings and facilities. What we have done is designed products that can withstand the acids and the wear and tear from the animals in these facilities for years and years. So it’s a worthwhile investment. Our focus has been primarily on concrete restoration of slats, floors, walls and then also the metal surrounding the building on the inside and the exterior. Our focus is maintaining th

Cattle futures drift lower, lean hogs down - CME

Chicago Mercantile Exchange (CME) cattle futures turned lower on Tuesday, as a lack of fundamental news and limited trading in the cash cattle market had price drifting down from the recent rally, Reuters reported, citing traders. Meanwhile, CME lean hog futures in the nearby and front contracts ended down as funds continued to short the market as a glut of slaughter-ready hogs continued to outweigh the levels of consumer demand, market analysts said. Wholesale prices for US pork have generally turned lower or remained relatively flat, traders said. The US Department of Agriculture (USDA) on Tuesday morning priced the pork carcass cutout at $98.98 per hundredweight (cwt), up 4 cents from Monday. Though pork belly prices firmed, loin prices continued to fall, USDA data shows. Consumer frustration over stubbornly high food prices, and ongoing uncertainty when interest rates might ease have been weighing on the pork market for a while, analysts said. New York Federal Reserve Presiden

AASV: Tongue tip fluid sampling for PRRS

Processing fluid has emerged as a sensitive tool for porcine reproductive and respiratory syndrome virus (PRRSV) monitoring, suggesting the use of tissues as viable specimens. Tongue tip exudate has recently gained attention as a viable postmortem specimen for PRRS monitoring. A study by Mariana Kikuti, DVM, PhD, and colleagues at the University of Minnesota, aimed to determine whether postmortem sampling of suckling pigs allows for the detection of PRRSV and determining the sensitivity of each postmortem specimen studied. Two farrow-to-wean farms undergoing a wild-type PRRS virus that had decided to pursue elimination were conveniently selected. Samples were collected at the farm some 8 and 20 weeks after the outbreak detection. Postmortem sampling of piglets found dead or euthanized was conducted. Postmortem specimens consisted of individual sterile swabs of the nasal, oral, and rectal cavities, tongue tips and blood collected directly from the heart. All specimens were stored and

Ag in the House: June 17 – 21

The House of Commons rose for the summer after June 19’s proceedings

HyLife Pork Reaches New Heights at the Taste of Steinbach

Where else can you enjoy supper with 500 friends on a runway?

© 2024   Created by Darren Marsland.   Powered by

Badges  |  Report an Issue  |  Terms of Service