by SUSAN MANN
An organic milk shortage in Ontario is impeding dairy processors’ ability to manufacture some products like yogurt and cheese to their fullest extent.
Guelph-based milk processor Organic Meadow said in a Jan. 21 letter to retailers its company has been impacted by the shortage more than other dairies. “It (the milk shortage) has limited our ability to produce some of our cultured products that utilize Class 2 milk, like yogurt, cream cheese, cottage cheese and sour cream.”
Organic Meadow CEO Don Rees says the shortage is having a “pretty significant” impact on the company’s business. “We participate in all organic dairy segments,” including fluid milk, yogurt, cheese, ice cream, and butter.
Rees would not disclose details of how much of a financial impact the shortage has had, saying they don’t publicly discuss the numbers.
Canadian-produced milk is sold to processors through a milk classification system for the manufacture of various products in classes outlined by the dairy industry. The classes range from Class 1, fluid milk and cream, to Class 5 (d) milk used for exported products for which the Canadian Dairy Commission has issued a permit.
The Organic Meadow letter, signed by Maurice Bianchi, director of marketing, consumer and trade, notes retailers will likely experience shortages of cultured products during this time of short supply. The company is working closely with Dairy Farmers of Ontario to rectify the situation.
Dairy Farmers general counsel and communications director Graham Lloyd says by email the organization is acutely aware of the shortage and is trying to find ways to get more organic milk into the system. The shortage isn’t in conventional milk.
Class 1 or fluid milk is the number one priority for both organic and conventional milk. Lloyd says DFO tries to satisfy processors’ orders for Class 1 milk first. Once those are fulfilled, orders for Class 2 can be addressed.
Class 2 is yogurt and yogurt beverages, such as kefir and lassi, along with ice cream, ice cream mix and ice milk mix, sour cream, fudge, pudding, soup mix, milk shake and milk shake mix.
Lloyd says there are 72 organic milk shippers in Ontario producing about two million litres a month. The demand is greater than 2.8 million litres a month, resulting in a monthly shortage of about 800,000 litres.
“This can be reduced by milk supplied by Quebec,” Lloyd notes. Companies can also use supplemental import permits to import organic products from the United States but “there is a shortage in the U.S. as well,” Lloyd says.
Rees says the milk shortage is cascading down to other products, such as cheeses and dairy ingredients. Demand from consumers, retailers and processors is “outstripping the supply of organic milk.”
Increased demand and lack of supply is causing the shortage, he says. “The organic farm community hasn’t migrated to organic dairy farming as quickly as the demand has picked up,” Rees says, adding it takes three years for a farm to transition to organic production from conventional. “It’s not going to happen overnight.”
Rees says educated, informed, health conscious consumers are driving the demand. They’re “searching for organic options in every single” food category, not just in dairy products.
The organic milk shortage has been felt since November 2014 “when the cows stopped grazing,” Rees says. Once the spring hits “there will be a little bit more milk available. We believe everybody needs to work together co-operatively to build the (organic milk) pool.”
The situation is particularly unfortunate for Organic Meadow, which supplies 70 per cent of the milk into the organic milk pool “yet we’re not able to access the amount of milk we require to make our Class 2, 3 (cheeses) and 4 (butter, dairy ingredients) products,” Rees says. On most days, Organic Meadow has enough milk to make its Class 1, fluid milk, products.
There are more than 60 organic dairy farmers who are members of the Organic Meadow co-operative. Marketing manager Michelle Schmidt says the milk from the Organic Meadow-member farms is sold to Dairy Farmers of Ontario along with milk from other organic farms. “All that milk is collectively pooled and then it is allocated to the different processors.”
To rectify the situation, Rees says the premium for organic milk has been increased by three cents per litre. Lloyd says Dairy Farmers has increased quota and incentive days for organic producers. The organization is also looking at creating an organic milk pool for the five eastern Canadian provinces that are part of the milk pooling agreement. They are: Ontario, Quebec, New Brunswick, Nova Scotia and Prince Edward Island. BF
Comments
Easy the TPP will fill the order .
As long as young progressive dairy farmers continue to reject the idea of organic dairy farming there will continue to be chronic shortages. We have some of the most progressive farmers producing some of the safest, highest quality milk anywhere - I fail to see the need of a secondary stream of milk production. Another marketing ploy to fool consumers into believing that this expensive product is worth the extra cost. Thankfully for the dairy industry, very few producers have "jumped on the band wagon"
Such a short sighted and uneducated comment.....
There is a market for organic milk and an opportunity to fill it in Canada. There is nothing progressive for organic or conventional Canadian farmers by having the borders opened to fluid milk from the states.
Give your head a shake and stop looking at Organic producers as competition. Their consumers will drink organic milk from the states over conventional milk from Canada. So start working together or you are going to loose the whole damn thing.
Well, I've just given my head a shake so let me educate you on a few facts. Any support I might've had for organic dairy vanished a long time ago when I heard how the milk was being picked up. In Quebec for instance where the industry is larger, they were picking up the milk with the same 2 compartment trailer as they were using to pick up conventional milk - organic milk in one compartment and conventional in the other. Only problem is - they use the same pump and hose! I can also assure you they weren't washing one compartment with soap and sanitizer and the other with vinegar. Its all about extracting a premium out of consumers pockets - and some people believe the lie its better for them. With some of the organic farms I've seen, I'll stick to safe, healthy, inexpensive conventional milk
Always said I cared too much for our cows to be an organic milk producer,if a cow was sick or needed treating then l treated her or called the Vet.I didn't wait till she was half dead and call the vet as a last resort like some of the stories l've heard about organic dairy herds.
I pastured our cows for over 25 years and never had the desire to cash in on the organic craze,it was just one big rip-off.
It is difficult to imagine how someone, anyone, can, in 2015, ignore 200% tariff barriers by claiming conventional milk is inexpensive.
It is even more preposterous to see somebody claiming that organic milk is "extracting a premium out of consumers pockets" as if conventional milk produced under supply management doesn't.
The above poster, probably inadvertently, demonstrates exactly why organic dairy farmers have every reason to distrust traditional dairy farmers and DFO itself.
Stephen Thompson, Clinton ON
At my local Zehr's, 4 litres of Harmony 2% organic milk is $8.99 and 4 litres of Beatrice 2% is $4.29.
Let's look at the portion of the retail price of each that goes to processing, wholesaling and retail margin. This is the value chain after the farm price.
About $1.50 of the Beatrice milk price per four litre bag goes to processing, wholesaling and retail margin. That's 35 %.
About $4 of the $4.70 premium per 4 litre bag of the organic milk goes to processing, wholesaling and retail margin.
So $5.50 of the organic milk price goes to processing, wholesaling and retail margin. That's 61 %.
This demonstrates the portion of the 4 litre price coming from consumers' pockets for conventional versus organic milk beyond the farm gate.
It is $1.50 for conventional milk and $5.50 for organic.
Even with the high margins, organic sales have grown at 20% annually for years .
Why the difference? It's what the market will bear.
It's the same reason that consumers usually pay more for bottled water (rather than get it "free" from the tap) than they pay for milk.
It's what the market will bear.
Would it also not be that organic should be cheaper to produce ?
So the buyers of organic are getting hit worse than they know .
The overlooked reality is that the premiums on organic crops are large enough that feeding them to cows to make milk is not giving enough returns with the current level of organic milk premiums. That is why there not enough supply. Retail margins are huge but not much of it gets to the farmers.
Unsigned, unsubstantiated allegation deleted by editor
Does any know how long it takes to have a dairy herd certified as organic ?
Then there are those who do not even feed certified organic feed and still ship the milk as organic . It is a real joke .
20 years ago supply management should been reworked and these problems would not be happening today
You neglect to realize that organic dairy farming goes beyond just feeding organic feed it also requires that cows be pastured and that more focus is put into preventable herd health issues and that long term structural changes are required to make that happen,
Sean McGivern
I can't seem to find whipping cream anywhere that does not have additives. I am in a city and have gone from store to store as well as looking on line. Organic products are the only ones that seem to have this so far. I would gladly go directly to a farm to buy the product, but I am not sure that is allowed. I did years ago in BC: It came in a big gallon glass jar, with all the thick cream on top. It was delicious. As I want to make cheese (small quantities), I do not want additives or ultra-pasteurization. (I wouldn't mind pasteurizing it myself, but raw milk sales are not legal here anyway.)
I also don't want to pay through the nose for it. Some of the comments here mentioned US milk being cheaper, but it is not the same quality as Canadian milk. What I do not understand is why is it so much cheaper in Ontario for milk than here in Montreal. A 4 -litre regular milk bag costs at least $6 in the stores here and in Ontario it is only $4 something from what I have heard. Can anyone shed some light on any of this?
A check of the above Google address indicates that retail prices of fluid milk in Quebec are regulated, meaning that Quebec milk consumers get "screwed" twice - once at the farm gate and once at the retail counter.
In addition, the belief that Canadian milk is of higher quality than US milk is largely predicated on the fallacy that Canadian-produced milk does not contain the artificial growth hormone, BST. The truth is three-fold:
(1) Almost all the fluid milk sold in the US is labeled as not containing artificial growth hormones (BST).
(2) Although BST is not allowed to be sold in Canada, Canadian dairy farmers can import it for their own use, and don't have to tell anyone when they do.
(3) there are no regulations preventing Camadian processors from importing and re-selling dairy products containing artificial BST.
Therefore, when it comes to the BST artificial growth hormone, any given container of US milk could easily be "safer" than any given container of Canadian milk.
Stephen Thompson, Clinton ON
Your right, selling unpasteurized milk is illegal and as a former dairy farmer would certainly not recommend raw milk to anyone.
However, organic cream would be your best option but l would imagine it would not be cheap, from my experience with organic, nothing is cheap!
Ian Cumming says Canadian processors will be sourcing it from the U.S.
U.S. milk is now coming in
Glad there is some kind of growth in our outdated dairy industry.
Why is anyone who works for DFO (Graham Lloyd) recommending that companies import Organic milk from the United States? There are Organic farms right here in Ontario wanting to fill this growing market demand but are unable since quota has NOT been increased to organic farms to match the growing market??
Credit days (quota free production) are issued to meet market growth and Ontario organic dairy farmers currently have 5 days per month - almost 20% of production above their owned quota. Current organics don't want new entrants to erode premiums or credit days issuance.
If I understand correctly, the milk produced by the owners of this particular Co-op doesn't necessarily go to the Co-op but is prioritized, by DFO, to go to the three big processors - therefore, it doesn't matter whether the organic dairy farmers who own this co-op have 30 credit days per month, as long as DFO is going to starve their co-op for milk inputs, the co-op will always under-perform and will never achieve the market penetration/market share it would achieve if not shacked by what appears to be the soviet-style milk allocation policies of DFO.
Therefore, as succinctly pointed out by Ian Cumming in 2007, DFO is rewarding/punishing the organic dairy farmers who own this co-op by forcing them to bow down to the mediocrity of, and complacency of, the socialist "bring everybody down to the same level" mindset implicit in traditional dairying and supply management itself.
Stephen Thompson, Clinton ON
What I would understand is the ultimate crediter is also the debtor is this true
If the portion of the $4.70 retail premium paid through to the organic dairy farmers went from 70 cents to $1.40, Ontario would have plenty of organic milk supply. But the early small co-ops, including Harmony, helped keep the farm price premium down and drove the organic business model on high processing and retail margins. Those high margins naturally attracted the big players to the show and they have the scale and market power to win with the big retailers. Perhaps people should look in their own mirrors for the culprits.
For the members of this particular co-op, the issue isn't about price, it's all about not being able to direct the milk produced on their farms to the processing entity they own.
The DFO milk allocation system is exactly like denying a hog farmer the right to feed his own corn and instead forcing him to buy his corn from a soviet-style corn "pool". Even though this farmer might have produced well-more than enough corn to feed his hogs, he would be denied the right to use it.
Therefore, no matter how hard they look to find anything else, all anyone can possibly see in this particular "mirror" is a soviet-style milk allocation system which rewards mediocrity and punishes incentive.
Stephen Thompson, Clinton ON
Then Stephen you are saying we need to change the whole system. That will never happen. P.S. the DFO should not be doing the farm inspections or setting the SCC. either.
It already HAS happened. Supply management died when provinces decided capping quota prices was a good idea. All were seeing today is a long, drawn out death scene befitting a grade 9 drama class.
We have been down this road before.The only reason some producers switch over to Organic is for the premium payout,then milk production outstrips demand,the first to go is the premiums and suddenly Organic dairy farming does not look as attractive as it did and you have farms returning to conventional.Thats one reason why we had more organic milk producers back in 2009 than we do now,6 years later.
Thats why there has to be some kind of extended contract pricing put forth by the processors.You can't have dairy farmers making the effort to go Organic and then losing that premium price a year or 2 after they get into it.
To ship certified organic milk, a dairy herd must be under organic management for at least 12 months. Organic feed has to be produced on land that has been free of prohibited inputs for at least 36 months pre-harvest. Organic standards permit feed from land in the final year of this transition to be fed to the herd on the same farm during the 12-month transition for the livestock, effectively shortening the total transition time to about 3 years.
Withholding necessary treatment from a cow in order to maintain organic status is a clear violation of the organic standards. (So, of course, is feeding non-certified feed, except in emergency situations.)
Yes, dual compartments transports have been used in Quebec. Rinsing hoses and pumps between farms is a pretty simple task. There are a number of soaps and sanitizers commonly used on non-organic operations that are also approved for organic use.
As a final note, it would appear that the cheap shots, unsubstantiated allegations, and general negativity directed at organic farmers, consumers and related organizations by a number of anonymous visitors here are in clear violation of the comment policy posted below.
This is what you get when you have supply controls in an industry, it stymies production and innovation.
Now we have the blessed TTP agreement, sanctifiying
an increase of a couple of % of duty free milk from world wide
competitors, omg the ship is going down.., why is it so terrible
to compete, why not equal opportunity for everyone ? That would'nt be fair is in the air.., its not fair that 34,000,000 Canadians need to pay twice as much for their dairy products, organic or not, compared our immediate US neighbours, to protect ca. 15,000 dairy farmers and their dairies from market reality.
wouldn't it be funny if the price of SM products here actually went up because
1) COP for SM had a price increase to help recover lost profits due to the TPP
2) the cost of imports was more because of the low CAN dollar
Why do you suppose the government protected supply management from being wiped out by TPP and other trade deals the way a few people here have been predicting for years?
Could it be because the idea works for most Canadians and results in a healthy product at stable, affordable prices that aren't much different than the US ones? Now if we could just get the same price fairness with large corporations selling things like herbicides, seeds and auto parts on both sides of the border life would be good. I've seen prices lower by 40 % for some of those things in the US.
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