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: 340

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

Canada-U.S. Trade Dispute Raises Concerns for Agri-Businesses

A Canadian Federation of Independent Business survey warns that ongoing Canada-U.S. trade tensions and tariffs threaten the viability of many affected cross-border agri-businesses.

New Canadian tariffs take effect against the U.S.

These levies include multiple ag items

Pulse Market Insight #305 – September 4, 2026

Black Sea Disruptions Shift Pulse Demand Toward Canada Over the past several years, Russia has grown into one of Canada’s largest competitors in pulse markets, especially for yellow peas into China and India, along with growing volumes of lentils and chickpeas moving into Turkey and South Asia. That’s what makes the current barriers to shipping out of the Black Sea region so important for the year ahead. The situation could change quickly, but for now the disruptions are limiting movement from two major exporters at the very time importers are lining up new-crop coverage. The early market signals suggest that demand is starting to shift toward Canada. The disruptions are landing in a year when pea supplies were already tightening. Production among major exporters is forecast just under 10.0 mln tonnes, down almost 1.5 mln tonnes from last year’s peak, with the largest declines in Canada and Russia. Effective export availability will shrink even more than the production numbers sugges

Amazing Agriculture Adventure Returns to Bring Hands-On Agriculture Learning to Manitoba Students

Agriculture in the Classroom–Manitoba (AITC-M) is pleased to announce the return of Amazing Agriculture Adventure (AAA), taking place September 22–25, 2026, at the Bruce D. Campbell Farm & Food Discovery Centre. This multi-day, interactive program gives Manitoba students the opportunity to experience agriculture firsthand through hands-on, curriculum-connected learning. Students connect directly with farmers, agriculture professionals and industry experts while exploring how agriculture connects to the food they eat, their communities, the environment and their everyday lives. This year, 1,100 students from 41 classrooms will participate in Amazing Agriculture Adventure, engaging in activities designed to spark curiosity, build agricultural literacy and create meaningful connections to Manitoba’s agriculture and food sector. “Amazing Agriculture Adventure brings agriculture to life through hands-on experiences, helping students discover where their food comes from and explore opport

Minister MacDonald announces up to nearly $895,000 to develop and test new clean technology to benefit Canada's indoor agriculture sector

Today, while visiting Hydragreens Produce Ltd. in Calgary, the Honourable Heath MacDonald, Minister of Agriculture and Agri-Food, announced funding of up to $894,673 for SmartGRO Bioengineering Inc. (SmartGRO) under the Agricultural Clean Technology (ACT) Program – Research and Innovation Stream. Building on the recently announced $3.2-billion National Food Security Strategy and its $750 million dedicated to controlled environment agriculture, this investment will help the Calgary-based start-up to develop and test new clean lighting technology to make year-round indoor agriculture more energy-efficient and environmentally friendly. SmartGRO is developing a unique system that uses ultra-fast pulsing LED lights, combined with plant sensors and artificial intelligence (AI). The sensors collect information about the plants such as temperature, health, and growth, and the AI then changes the lighting to give the plants exactly what they need to thrive. Unlike regular LED lights that stay

© 2026   Created by Darren Marsland.   Powered by

Badges  |  Report an Issue  |  Terms of Service