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

Supporting B.C. tech strengthens general aviation emergency response

Two B.C. companies are receiving provincial support to deploy clean-energy technology that strengthens backup power reliability for general aviation aircraft in B.C., replacing diesel generators with battery storage to keep critical services, such as wildfire response, medical transport and search and rescue, running during emergencies. With as much as $1 million being provided through B.C.’s Integrated Marketplace, Abbotsford-based Fast Air will deploy a mobile battery and solar power system developed by Richmond-based Holinova at the Abbotsford International Airport. The system is designed to power ground equipment and aircraft charging needs without relying on the electrical grid, providing a cleaner alternative to traditional diesel-powered backup power systems and helping maintain operations during outages or high-demand situations. The project is anticipated to improve charging efficiency, support flexible aircraft movements and enhance operational resilience during periods of

Protein Industries Canada invests in AI technology to boost on-farm productivity and bring new solutions to farmers

Protein Industries Canada is investing in two new artificial intelligence (AI) projects to help Canadian farmers and the value-added agriculture sector improve on-farm productivity with new tools, supporting a stronger, more sustainable and competitive food system. Together, the projects represent a total investment of $4.9 million, including up to $2.2 million from Protein Industries Canada, and will help growers act earlier on disease risk, and improve safety and accuracy in grain storage. “Canadian farmers are increasingly adopting cutting-edge technologies to strengthen productivity, sustainability and global competitiveness,” said the Honourable Mélanie Joly, Minister of Industry and Minister responsible for Canada Economic Development for Quebec Regions. “Through Protein Industries Canada, one of Canada’s global innovation clusters, we are investing in made-in-Canada AI solutions to help producers protect their yields, optimize inventory management and make informed business de

Seed-treatment timing critical

Most seed put into the ground in the Midwest is treated, but the jury is still out as to the most effective use of chemical and biological additives. There’s little doubt that treatments are beneficial but there’s much to be learned. “What’s probably getting more growth is on the inoculants side,” said Connor Sible, a University of Illinois professor who has conducted various research projects on treatments. He said inoculants are increasingly being chosen for aiding plant growth rather than battling pests. “A lot of products added are targeting nutrient availability,” he said. “There’s been a lot of research in the (United) States and internationally – greenhouse studies in very controlled environments.” An extensive study by scientists at REVA University in Bangalore, India, indicates that “seed priming” is a cost-effective strategy for improving plant health and development. The study report compiles information from almost 400 studies worldwide. It shows that biological seed tr

Trail King: Transport solutions for every trailer owner

Replace or refurbish? It’s a question every hauling trailer owner encounters at some point down the road. According to the experts at Trail King Industries, Inc., the right time to evaluate a trailer’s future depends primarily on age, total mileage and usage. While some owners might use their trailer two to three times a week for their own business needs, others are operating a business and may run their trailers every day throughout the year. Trail King Industries, Inc., headquartered in Mitchell, South Dakota, is the leading manufacturer of a complete line of hauling trailers in North America. Since 1974, the company has designed, engineered and manufactured trailers across diverse industries including construction, agriculture, waste and recycling, transportation and specialized hauling. Its experienced teams help provide solutions to hauling challenges whether that entails paint, parts, trailer refurbishment services, customer service or warranty issues. According to the company

Canadian Innovation Aims to Transform Nitrogen Fertilizers While Eliminating Microplastics

A British Columbia ag-tech company is developing a biodegradable fertilizer coating that could help farmers use less nitrogen, reduce input costs, and eliminate microplastics from controlled-release fertilizers

© 2026   Created by Darren Marsland.   Powered by

Badges  |  Report an Issue  |  Terms of Service