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: 318

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

PCDMN Soil Moisture Maps: Risk of stem rot sclerotial germination, July 2, 2025

June and early July are important months in terms of field crop disease development.  For diseases such as sclerotinia stem rot of canola and ergot of small grain cereals, suitable pathogen development must occur to produce spores before host infection can take place.  The pathogens associated with both diseases overwinter as resting bodies known as sclerotia, which are compact masses of hyphae (Figure 1).  Germination of stem rot sclerotia to produce the golf-tee shaped apothecia, aka carpogenic germination, requires suitable moisture conditions and moderate temperatures: Typically, sclerotial germination takes up to three weeks with the occurrence of temperatures that range from 10 to 20oC and suitable moisture conditions Soil moisture levels at or close to field capacity at the soil surface are needed for germination of sclerotia, although some germination can occur when levels are somewhat less that field capacity Field capacity varies depending on soil texture but is generally ar

Beef Producers Have a Game Plan to Keep Canada FMD-Free

Canada’s last outbreak of Foot and Mouth Disease (FMD) occurred in Saskatchewan in 1952, and, since then our herds have remained free of FMD. According to the Food and Agriculture Organization (FAO) of the United Nations, Canada is designated as FMD-free without vaccination. This designation is awarded to countries that do not have the FMD virus circulating among cloven-hoofed animals without regular preventative vaccines. The 1952 outbreak was traced to a single sausage brought over by a farm worker from Germany. This seemingly harmless act of bringing a foreign food product on a flight had devastating effects on the Canadian economy, costing approximately $2 million in expenses and lost revenue at that time. If an outbreak were to occur in Canada today, it is estimated that the economic impact could soar to over $80 million.  You Are Here! Prevent and Prepare Canada is currently able to prevent Foot and Mouth Disease from crossing our borders and to prepare for any suspected FMD c

Working together to promote 4R practices to farmers

Fertilizer Canada and Alberta Grains have developed a 4R memorandum of understanding (MOU) that outlines how Agriculture and Irrigation, the agriculture industry and farmers can work together to bolster data collection and communication to increase 4R practice adoption levels. The MOU, a three-year agreement, was signed by Agriculture and Irrigation, Environment and Protected Areas, Alberta Grains and Fertilizer Canada. The objectives of the MOU are to improve production and environmental stewardship through greater awareness of 4R practices and principles. It also aims to establish mechanisms to pursue common objectives and priorities related to soil health/quality and nutrient management, and to support the Alberta government's commitments to the crop industry’s sustainable growth. “I’m so happy to announce the government’s MOU with Fertilizer Canada and Alberta Grains, set to increase awareness of 4R principles and practices. The bottom line is that this approach helps producers m

Grill Season is Here and It’s Never Been Fresher

“Grilling naturally brings out the vibrant flavours of fresh, seasonal ingredients,” says Garry Scott, Vice President of Marketing at Napoleon. “It’s one of the best ways to enjoy everything this time of year has to offer – bold flavours, fresh air and good company.”

© 2025   Created by Darren Marsland.   Powered by

Badges  |  Report an Issue  |  Terms of Service