Canada's dairy industry struts its stuff

Thursday, May 28, 2015

by JIM ALGIE

While dairy farm numbers continue to decline, Canadian milk production has risen in recent years along with processing activity and revenue and the economic impact of the country’s supply-managed dairy industry, a new Dairy Farmers of Canada website says.

Government tax receipts and processing industry revenue are among leading beneficiaries of an industry that contributed $18.9 billion in Gross Domestic Product (GDP), 215,000 jobs to the Canadian economy in 2013 and $3.6 billion to government coffers, the site says.

“We contribute in a huge way to the economy especially in rural communities across the country,” DFC President Wally Smith said in an interview, Friday. “In many places, we are like the cornerstone of the economy . . . and it filters down into the community, into your hardware stores, into your school programs, into the social fabric,” Smith said.

Text on the website’s home page coins a phrase, “the milkledown effect,” describing it as “a made-up term for something very real.” With graphics and text, the site argues “the benefits of Canadian dairy farming to local communities in all kinds of ways.” It also features video interviews with dairy farmers in Nova Scotia, Camrose, Alberta and London, Ont.

The Ottawa-based dairy farmers’ group “softly launched” its campaign the week of May 18 with radio advertisements, a DFC statement says. On Thursday, the agency announced details of the campaign which is expected to continue through June and July with television, print and digital media activity as well as public relations events highlighting regional dairy spinoffs.

The website relies on data from a recently-published Dairy Farmers of Canada-commissioned study, The Economic Impact of the Canadian Dairy Industry in 2013. It’s also part of a growing lobbying effort by agricultural interests focused on current, international trade talks about the Trans-Pacific Partnership (TPP).

Talks among 12 participating TPP countries appear to be nearing a conclusion. A bill to provide U.S. President Barack Obama fast track authority to sign a deal passed the American Senate recently and is to be considered soon by the House of Representatives. Terms of the agreement have yet to be disclosed although U.S. trade officials have spoken publicly about their effort to gain access to Canada for American goods now restricted by supply management.

Smith, who farms on southern Vancouver Island near Chemainus, plays down the “end game” talk about TPP, citing a recently-cancelled meeting of trade ministers that had been scheduled for Guam. He also expressed strong criticism of U.S. bargaining positions that have put Canada’s supply-managed sector “under a great deal of pressure.”

“What is really unfair about all this is that the United States doesn’t discuss in the Trans-Pacific Partnership negotiations anything about domestic support,” Smith said. “So domestic support remains untouched and they want all other countries to unilaterally disarm,” he said. “Is the TPP a benefit to all countries that are participating or it is showing favouritism to the U.S.?” Smith said.

Dairy Farmers of Canada launched its “milkledown effect” campaign, Thursday, a day after the Canadian Pork Council published a study on the importance to Canadian hog farmers of new export access to TPP countries, notably the United States and Japan.

Also this week, an alliance of producers of Canada’s supply-managed commodities issued a statement of support for Canadian government efforts at TPP to “defend the Canadian dairy, poultry and egg farmers’ interests.” As well, the Canadian Cattlemen’s Association is a member of the Five Nations Beef Alliance – including the Cattle Council of Australia and cattle farming groups in the United States, Mexico and New Zealand – which has actively campaigned for liberalized trade through TPP.

Dairy Farmers of Canada’s 2013 economic impact report, dated Mar. 31 and released publicly in early May, is the third in a series of similar studies conducted in 2009 and 2011 by Quebec-based consulting firm ÉcoResources. The 2013 analysis describes dairy as “one of the largest food industries in Canada” and “a mainstay of the economy” built on $5.9 million in milk and cream sales by 12,234 farms in all regions.

Dairy sales represented 11 per cent of total farm cash receipts in 2013. The shipments of Canada’s 465 processors represented 17 per cent of the sales volume of Canadian food and beverage sector, 2.5 per cent of all Canadian manufacturing, the report said.

The number of individual farms declined about 7.9 per cent between 2009 and 2013 and employment dropped about four per cent to 22,700. Even so, the number of processing plants grew by three percent with Ontario showing the largest increase.

As well, milk production rose between 2009 and 2013 by about two per cent to 78.2 million hectolitres, the report said, citing advances in feed, disease prevention and genetics. Those trends have continued since 2013, Smith said, citing rising trends in butter and cheese consumption.

“We have certainly been growing the market here domestically, probably in an unprecedented way in the last little while,” Smith said. The DFC president said he expects the Canadian government will maintain what he described as a “balanced trading position” in support of supply management as TPP talks continue.

The ÉcoResources report shows milk processing activity concentrated mainly in Quebec and Ontario, reflecting the concentration of dairy farmers in those provinces. Ontario and Quebec host 69 per cent of milk plants and 82 per cent of Canadian dairy farms.

In all, dairy production, processing and sales accounted for 214,845 jobs in Canada, a contribution to GDP of $18.9 billion and $3.6 billion in tax revenue to three levels of government. Data for Ontario shows 37.4 per cent of the job total at 80,338 and 39.9 per cent of the national GDP contribution at $7.5 billion.

In Ontario alone, dairy production accounted for a total tax contribution in 2013 of $480 million, $200.2 million to the federal government, $230 million to the province and $77.2 million to municipalities, the report says. Dairy processing in Ontario during 2013 accounted for $923 million in government tax revenue. BF