How Canadian Dairy Farms Can Adjust to New Dairy Demand

Emily Folk

Published

4 years ago

6 minute read

How Canadian Dairy Farms Can Adjust to New Dairy Demand

Many changes occurred around the world as a result of the coronavirus pandemic. In Canada, while schools and businesses closed, consumers flocked to the supermarkets to buy essentials.

Perishable goods flew off the shelves, resulting in limits being placed on items like dairy and poultry. The standard distribution system schedule put in place for dairy products could not keep up with buyers’ increased shopping.

While retail demand from grocers skyrocketed, orders from the foodservice industry plummeted. This has resulted in unforeseen fluctuations in the dairy market.

Hotels, restaurants, schools and eateries are closed or operating at limited capacity. As a result, there is now an enormous surplus of milk that has nowhere to go. Farmers are not equipped with storage spaces to accommodate the excess supply. Unlike agriculture products like potatoes, milk has to be sold immediately or risk spoilage.

Cows will continue producing milk, regardless of fluctuations in the market. While farmers have the option to reduce the size of their herd or change diet or nutrition, these things could prove detrimental when the market stabilizes.

The Supply Management System

A supply management system controls production quotas and imports for Canadian dairy, chicken, turkey and eggs. It was established in the1970s to coordinate production and demand while simultaneously controlling imports. By operating under this method, prices are stabilized for both producers and consumers.

A national agency represents each industry, and they are in charge of setting production levels that match provincial demand. Farmers in each province are allocated production quotas that are meant to prevent surpluses or shortages.

The original quotas were based on consumer needs pre-pandemic. As a result of these unforeseen events, farmers must now adjust to the new Canadian dairy demand. Here are four main ways farmers can adapt to the changing times.

Dump the Milk

Producers say that discarding raw milk is inevitable at this stage. Farmers are reporting that they have been asked to take turns dumping milk. Although they’re paid for it, the waste could amount to as much as 5 million litres every week.

This disposal method is unsustainable and should only be utilized while the market is above capacity. Cows must continue to be milked to keep them comfortable and healthy, and production must continue to ensure product availability in retail stores.

Donate to Food Banks

Rather than dumping milk, some farmers have begun donating to food banks to support Canadians in need. While this is a positive form of dispersing the milk surplus, it has the potential to overwhelm food banks that may not have the storage capacity to support this influx.

Additionally, the raw milk provided from farmers must be processed, which complicates the standard donation process.

Improve Operations

Dairy farmers should focus on improving operations to become more efficient and cost-effective. Many producers have begun investing in updated equipment and robotics to save time and money. Competition is set to increase as a result of import growth projected for the next decade. To maintain a market edge, operations should be improved and simplified wherever possible.

Expand or Retire

In 2019, the Canadian federal government announced an aid package valued at $1.75 billion to compensate supply-managed dairy producers over an eight-year period. The Dairy Direct Payment Program is one part of this aid package and provides $345 million payments as compensation during 2019 and 2020.

The aid package was proposed as a result of import shifts. The Canadian government has opened part of its domestic market to foreign producers as part of several free-trade negotiations. To adapt to increased competition from foreign products, Canadian producers should plan to expand their operations or retire. Larger farms will be able to sustain demand while simultaneously upgrading their methods to be constantly improving.

Smaller producers may not be able to afford the necessary production updates to keep up with competitors.

Future Demand

These are unprecedented circumstances. As schools, businesses and restaurants reopen, dairy demand will increase. With indoor capacity requirements and shifts in consumer trends, consumption levels will undoubtedly continue to fluctuate.

While farmers should take steps to dispose of surplus responsibly, they should not halt production or decrease their operation size.

Emily Folk

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Trump Floats Massive Tariffs On John Deere If Manufacturing Shifts To Mexico

Published on September 23, 2024

Todayville

From the Daily Caller News Foundation

By Mariane Angela

Former President Donald Trump issued a warning Monday about imposing 200% tariffs on John Deere products if the company relocates its manufacturing operations to Mexico.

Trump engaged with local farmers and manufacturers during an event in Smithton, Pennsylvania, about the impact of China’s economic policies on the U.S. economy, according to the Associated Press. The former president highlighted his economic strategy against Vice President Kamala Harris by pointing out the potential benefits of tariffs and increased energy production, which he argued could help lower costs and protect local industries.

Trump highlighted John Deere’s recent decision to move some manufacturing to Mexico, and he threatened a 200% tariff on the company should it proceed with its plans under his potential administration, the AP reported.

JUST IN: Donald Trump points at the tractors behind him, tells John Deere that if they move their business to Mexico he is going to put a 200% tariff on them.

🔥🔥🔥

The comments came while Trump was speaking to farmers in Pennsylvania.

“I will tell you that I just noticed… pic.twitter.com/5wpEAuTEo4

— Collin Rugg (@CollinRugg) September 23, 2024

“I just noticed behind me John Deere tractors, I know a lot about John Deere. I love the company, but as you know, they announced a few days ago that they’re gonna move a lot of their manufacturing business to Mexico,” Trump said, according to a video posted on X. “I’m just notifying John Deere right now. If you do that, we’re putting a 200% tariff on everything that you wanna sell into the United States. So that if I win, John Deere is gonna be paying 200%.”

John Deere previously announced that it will lay off roughly 610 employees across three of its plants in Illinois and Iowa. The company announced on May 31 that it will relocate skid steer and compact track loader production from Dubuque, Iowa, to Mexico by the end of 2026 as part of a broader strategy to enhance efficiency and manage rising manufacturing costs amidst changing business conditions.

Agriculture

Farm for food not fear

Published on September 15, 2024

Todayville

From the Frontier Centre for Public Policy

By Lee Harding

Fall harvest is in the storehouse. Now, let’s put away all proposals to cap fertilizer inputs to save the earth. Canadian farmers are ensuring food security, not fueling the droughts, fires, or storms that critics unfairly attribute to them.

The Saskatoon-based Global Institute for Food Security (GIFS) did as fulsome an analysis as possible on carbon emissions in Saskatchewan, Western Canada, Canada, and international peers. Transportation, seed, fertilizer and manure, crop inputs, field activities, energy emissions, and post-harvest work were all in view.

The studies, published last year, had very reassuring results. Canadian crop production was less carbon intensive than other places, and Western Canada was a little better yet. This proved true crop by crop.

Carbon emissions per tonne of canola production were more than twice as high in France and Germany as in Canada. Australia was slightly less carbon intensive than Canada, but still trailed Western Canada.

For non-durum wheat, Canada blew Australia, France, Germany, and the U.S. away with roughly half the carbon intensity of those countries. For durum wheat, the U.S. had twice the carbon intensity of Canada, and Italy almost five times as much.

Canada was remarkably better with lentil production. Producers in Australia had 5.5 times the carbon emissions per tonne produced as Canada, while the U.S. had 8 times as much. In some parts of Canada, lentil production was a net carbon sink.

Canadian field peas have one-tenth the carbon emissions per tonne of production as is found in Germany, and one-sixth that of France or the United States.

According to GIFS, Canada succeeds by “regenerative agriculture, including minimal soil disturbance, robust crop rotation, covering the land, integrating livestock and the effective management of crop inputs.”

The implementation of zero-till farming is especially key. If the land isn’t worked up, most nutrients and gases stay in the soil–greenhouse gases included.

Western Canada has been especially keen to adopt the zero-till approach, in contrast to the United States, where only 30 percent of cropland is zero-till.

The adoption of optimal methods has already lowered Canadian carbon emissions substantially. Despite all of this, some net zero schemers aim to cut carbon emissions by fertilizer by 30 percent, just as it does in other sectors.

This target is undeserved for Canadian agriculture because the industry has already made drastic, near-maximum progress. Nitrates help crops grow, so the farmer is already vitally motivated to keep nitrates in the soil and out of the skies–alleged global warming or not. Fewer nutrients mean fewer yields and lower proteins.

The farmer’s personal and economic interests already motivate the best fertilizer use that is practically possible. Universal adoption of optimal techniques could lower emissions a bit more, but Canada is so far ahead in this game that a hard cap on fertilizer emissions could only be detrimental.

In 2021, Fertilizer Canada commissioned a study by MNP to estimate the costs of a 20 percent drop in fertilizer use to achieve a 30 percent reduction in emissions. The study suggested that by 2030, bushels of production per acre would drop significantly for canola (23.6), corn (67.9), and spring wheat (36.1). By 2030, the annual value of lost production for those crops alone would reach $10.4 billion.

If every animal and human in Canada died, leaving the country an unused wasteland, the drop in world greenhouse gas emissions would be only 1.4 percent. Any talk of reducing capping fertilizer inputs for the greater good is nonsense.

Lee Harding is a Research Fellow for the Frontier Centre for Public Policy.