News Coronavirus
After India and the US, Canada must also let the milk run
The atmosphere in the global dairy market seems to be getting more and more grim. After India and the United States, it is also Canadian dairy farmers' turn to let their precious milk run away.
Dairy farmers in Ontario, Canada, received a March 31 notice from Dairy Farmers of Ontario, the agency that trades milk for dairy farmers in Ontario, that they may have to drain milk. Barely 2 days later, the first dairy farmers were summoned to actually do this.
Several provinces suffered
The outbreak of the corona virus has ensured that there is a milk surplus in several provinces. Now that schools, businesses and restaurants are closed, the sales market has shrunk considerably. This puts processors in trouble. They can't get rid of the milk and dairy products already, so they try to avoid extra supplies. Dairy farmers are, however, simply compensated for the milk they cannot sell.
Not only Ontario is confronted with this, also in the province of Saskatchewan dairy farmers are forced to let milk go. Now, according to reports, the milk is still collected in Saskatchewan and then dumped. That is not the case in Ontario. The dairy farmers there receive a telephone call that the milk will not be collected.
Other provinces are not yet being heard. Canada's largest dairy province, French-speaking Quebec, has not yet issued a statement. However, there are messages on Twitter showing that dairy farmers from Quebec are draining milk. The province of Alberta has indicated that it wants to look at possibilities to store dairy products such as butter and cheese and is investigating the possibilities of donating milk to food banks.
Canadian dairy sector
The Canadian dairy market is regulated differently than we are used to in the Netherlands. In Canada, each province has an intermediary that resells the milk to the processors. The province of Ontario has Dairy Farmers of Ontario, Alberta has Alberta Milk, and Saskatchewan has SaskMilk. These organizations market the milk and sell it to the dairy farmers. In addition, Canada still uses a quota system, in which processors must purchase the milk. As a result, the dairy farmers are assured of sales and the market, and thereby the price, remains stable.
Jorine Cosse
© DCA Market Intelligence. This market information is subject to copyright. It is not permitted to reproduce, distribute, disseminate or make the content available to third parties for compensation, in any form, without the express written permission of DCA Market Intelligence.