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: 317

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

Genomics and AI Programs to strengthen Canada’s agrifood sector

Protein Industries Canada announced an additional $15 million in funding to advance genomics and AI technologies bringing new tools to plant-breeders, farmers, ingredient processors and food manufacturers. Projects that will be considered could involve the development of tools that accelerate seed genetic work; supply chain optimization; on-farm information gathering; quality assurance and food safety protocols; and ingredient and food formulation. CEO of Protein Industries Canada Robert Hunter said this will enhance genetics that provide farmers with more resilient, high-performing options. “At the same time, our investment into artificial intelligence will support the development of tools that boost on-farm productivity and sustainability,” he said. “Together, these advancements—combined with our full value-chain approach—will strengthen Canada’s position as a global supplier of nutritious, functional plant-based food, feed and ingredients, while contributing to our goal of buildi

Cereals Canada provides updates on the Prairie crop

Cereals Canada has launched its Growing Season Progress Report. Cereals Canada works with provincial departments of agriculture in Alberta, Saskatchewan, and Manitoba throughout the growing season to gather information on seeding, crop conditions and quality, and harvest progress for spring wheat. The information is compiled and presented in an interactive, user-friendly format with maps, provincial highlights, and links to crop reports. Historical data for the past five years is also available for comparison purposes. Global buyers use the interactive report to stay informed, according to Leif Carlson, Cereals Canada director of market intelligence and trade policy. “With most wheat acres located in the Prairies, the report provides global buyers with a glimpse into how the Canadian wheat crop is progressing, from seeding to harvest,” Carlson said. “Global customers want to be kept informed about how the Canadian wheat crop is progressing over the growing season. We make it easy f

Applications Are Now Being Accepted for the 2025 Regional Knowledge Mobilization Initiatives Funding Program

The Beef Cattle Research Council (BCRC) is pleased to announce that the funding program for regional knowledge mobilization initiatives has been renewed, and applications are now being accepted. The application deadline is June 13, 2025, at 11:59 PM MT.  Funding is available for, but not limited to, events. The knowledge mobilization events eligible for funding must involve beef producers and be aligned with the Canadian Beef Research and Technology Transfer Strategy. While recurring event sponsorship is not eligible, innovative knowledge mobilization activities held independently or in conjunction with existing events will be considered.  Preference will be given to: New and innovative engagement ideas such as presenting information in a new format or demonstrating a new technology Workshops and tours related to water quality, water management and winter and summer water system choices and maintenance Demonstrations and workshops on biosecurity practices for improved calf health

Cereals Canada Launches its 2025 Growing Season Progress Report

With Canada's 2025 spring wheat crop underway, Cereals Canada has resumed regular updates to its interactive Growing Season Progress Report. The report will continue to be updated until harvest is complete across all three Prairie provinces.

WWF-Canada scaling up seed orchard program to address seed shortage across Canada

This spring, WWF-Canada is scaling up an initiative to help restore ecosystems across Canada by increasing the native plant seed supply. The organization awarded grants to 13 First Nations, organizations and businesses in five provinces to support the establishment and expansion of seed orchards — native plant growing operations that produce the locally-sourced seed needed for habitat restoration projects.

© 2025   Created by Darren Marsland.   Powered by

Badges  |  Report an Issue  |  Terms of Service