New dairy's prospects grow as organic milk surplus shrinks
Sunday, December 6, 2009
by PATICIA GROTENHUIS
The disappearance of an organic milk surplus that has persisted over the past few months is encouraging for a new dairy scheduled to begin operation next year.
Steen’s Dairy, Erin, and Organic Meadow, Guelph, have formed a partnership to expand production capacity and explore new markets. The new plant, a retrofit of an existing plant, is expected to be completed in early 2010, and will be 20,000 square feet, as opposed to Steen’s current 2,500.
“The old location was too small, we were turning people away,” says Tom Steen, president of Steen’s Dairy. “Lately there has been a huge increase in organic demand although conventional has a more level growth.”
Bill Mitchell, a spokesperson for Dairy Farmers of Ontario, says demand for organic milk is constantly changing, and so is the supply. This leads to fluctuating periods of surplus or shortage in the market. Because of this, a surplus may be created again in the future, but it will not be permanent.
The new dairy will obtain organic milk from producers in southwestern Ontario and market it across Eastern Canada. Conventional milk will come from current Steen’s suppliers in Wellington and Dufferin counties and be marketed in the Greater Toronto Area. Both companies will continue to market milk under their own brands.
The plant will cost about $5 million to build. The provincial government’s Rural Economic Development Program contributed $495,000 to the venture in November.
“This support from the Government of Ontario will enable both Organic Meadow and Steen’s Dairy to expand their range of milk products and to introduce innovative new products,” says Steve Cavell, CEO of Organic Meadow.
The plant will employ 20-25 people and run eight to 10 hours each day when it opens. Steen is confident these numbers will increase as time goes on and product lines are expanded.
Although production numbers for the new plant are not known at this time, Steen says a much larger quantity of milk will be processed each hour.
The plant will use the same equipment to process both organic and conventional milk. Sequencing and cleaning procedures will be used to prevent any blending of the two kinds, says Steen.
The same principal will allow for expansion into milk from other species. Cavell states adding goat’s milk to the product list is being explored.
The dairy will be the first new dairy in Ontario in over 10 years, and since Organic Meadow is a co-operative, it will be the second farmer-owned dairy in Ontario. The other is Gay Lea.
“It’s good news. It’s local milk produced in local plants which will help rural Ontario,” says Cavell. BF