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.
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.
Read more from Emily Folk
I’m Emily Folk, and I grew up in a small town in Pennsylvania. Growing up I had a love of animals, and after countless marathons of watching Animal Planet documentaries, I developed a passion for ecology and conservation. You can read more of my work by clicking this link: Conservation Folks.
City Council urged to get back to the table to vote on future of Westerner Park
Letter submitted by Lyn Radford (Chair of the 2019 Canada Winter Games)
Lack of Council Leadership or Election Posturing?
In this unprecedented time of the pandemic, of polarized political views I have tried to stay out of commenting on decisions our political leaders have to make. We all know there is not usually a clear-cut answer. But this delay situation by City Council regarding the Westerner clearly baffles me.
First, I want to send out a thank you to both the Westerner and City Administration for their hard work and excellent reports and options for this very unfortunate situation. Second, I want to thank the Westerner Board for not running from a situation but rather staying to try to sort out a mess. As a volunteer myself, I know this has not been an easy situation for you and your families. I also want to acknowledge Councillors Wyntjes and Dawe for wanting to move this forward, whatever their decision would have been.
The City’s Vision Statement and Strategic Goals clearly lays out a pathway to help guide Council to make a positive, community benefiting decisions. “Innovative Thinking, Inspired Results, Vibrant Community” are their key words.
Strategic Goal #4 “A chosen destination: We are a four-season destination where visitors and residents enjoy our parks, trails and distinctive amenities, all within our “city in a park”. Centrally located in the province, we attract events that generate investment and enhance our community identity.
My question is how by delaying a decision does City Council justify following their Vision Statement and Strategic Goals.
I add these queries and statements:
- You have had more than year to gather information, make enquiries, have closed council information sessions, spoke to community members, and should have delved into this. You received the report far in advance of the special session and should have come ready for a decision without delay. Why did this not happen?
- The City has been locked and instep with the Westerner in the last year. The Westerner has fulfilled all requests and have been measured through two (very expensive) audits by Deloitte.
- There is over $3.5 million generously donated by a private family, held in trust for the Westerner Foundation, that could be doubled with a potential matching grant that will be dispersed upon a sustainable decision for Westerner Park, if a deal has been reached by May 15th. And our community will most likely lose this because of this delay. Sad.
- If CIBC closes on the loan for default (community this is very, very real), there will be hundreds of thousands of dollars spent putting this into receivership, of which our community will have no gain or say. And further, we will not have an event center capable of hosting the economic driver our community so sorely needs right now, as we know what the vacant downtown and business parks are looking like today.
- How much staff time has been spent already? Spend more money delaying a decision, no matter what the cost?
- Twice, not just once, in your session, councillors questioned the capabilities of the Westerners CEO. Did you not have time in the closed sessions to request a character assessment? Do councillors feel this was the right, very public forum for this? Rather than being able to say you did your due diligence in a professional and respective manner?
- Through the whole poor decision making by the Westerner Board that brought this terrible situation forward, there were three members of today’s council that actively sat on the Westerner Board. Maybe some ownership needs to happen here and a review of the responsibility process for Councillors to be revisited, giving a level of responsibility to council. If you want to sit at the table, then accept all the responsibility as every other board member has had to do.
- Further, the initial loan that started this process way back in 2017 and subsequent refinancing all had to be signed through a tri-party agreement by the City of Red Deer, fully knowing that this result could happen. Why is there any hesitation here?
- The window of borrowing from the province is very small now, missing this will create more costs.
- The Westerner annually, has been contributing a $150 million/year economic impact to our community. They were one of the largest employer’s, well over 600 employees each year and then add all the employees of the supporting vendors, we can comfortably say that in a year well over a thousand of our community members that pay property taxes are impacted by the Westerner directly.
- The Westerner has been a volunteer ran organization for 130 years. These volunteers and eventually along with paid staff have contributed so much to our “vibrant community”, building an asset value of over $57 Million dollars. This is a big bump but not a mountain, lets deal with it.
- No matter who you are or what your interests are, the Westerner has been providing experiences for us for 130 years – concerts, sporting events, rodeo events, fairs, shopping opportunities, cultural experiences, first jobs, first dates, health fairs, Agri trade, a place to first learn to drive, the day you wed, celebrating the season, ringing the New Year……all for our community
In conclusion, what we need right now is Council members to host a special meeting immediately and make a decision one way or another. I sincerely hope the decision will be to support, empower, trust and not control or try to compete with the community run Westerner Board, volunteers, and staff to rebuild a “distinct community amenity”. It can become a strong thriving contributing member of our broken community once again. We are in need of some strong leadership.
Carbon Tax and Clean Fuel Standard a double blow to Canadian farmers
This post is submitted by Red Deer Mountain View MP Earl Dreeshen
MP DREESHEN TABLES PETITION ON CARBON TAX
AND CLEAN FUEL STANDARD IN HOUSE OF COMMONS
MP Earl Dreeshen tabled a petition in the House of Commons today, on Canada’s Agriculture Day, calling on the Liberal government to exempt all direct and indirect input costs that the Carbon Tax imposes on farmers, while also calling on the government to repeal the Clean Fuel Standard.
“Canadian farmers and ranchers are losing tens-of-thousands of dollars in net income each year because of the Liberal government’s ill-conceived carbon tax and that is simply not sustainable for most of them,” MP Dreeshen said.
‘Our global competitors are not burdened by the huge carbon tax debt. But Canadian farmers and ranchers do not have the ability to add the carbon tax levy to the price of their product. They have to pay this tax as it is levied by their input suppliers. Exempting input costs will put Canadian farmers on an equal footing with their international competitors and allow them to keep producing the world’s best and most nutritious foods.”
The Liberal government announced at the end of last year that the carbon tax will triple to $170 per tonne by 2030 following a commitment made in the last election that the tax would not increase beyond $50 per tonne. According to the Parliamentary Budget Officer, a farm in Alberta with 850 seeded acres of crops can expect the Liberal government’s carbon tax cost it more than $17,000 per year once the tax reaches $50 per tonne in 2022.
The Liberal government is also proceeding with the so-called Clean Fuel Standard, which some studies estimate will represent a total cost to the Canadian economy of $7 to $15 billion and 50,000 lost jobs, including an impact of $389 million to the Agricultural sector. “Nobody needs or wants an extra tax on top of another tax so we need to repeal the CFS before it even gets off the ground,” MP Dreeshen said.
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