Canada’s The Globe and Mail reports that it obtained a confidential report presented last week to the Dairy Farmers of Ontario (DFO), which lays out the problem:
- Imported “designer” dairy ingredients are replacing Canadian milk in products such as milk and cheese
- There’s a glut of unwanted milk, which is being diverted to animal feed or even being dumped
- Government support for the supply management program is waning in Canada
“The industry is approaching a crossroads beyond which the existing policy framework is no longer sustainable,” the Globe and Mail said the report concluded. “A policy environment, which levers export potential within existing trade agreements and enables the marketing system to be operated with more milk and larger growth allowance, is essential.”
Milk protein isolates are the named import replacing Canadian dairy products, which come in duty-free from the U.S. and Mexico, and will face a similar scenario when the new European trade agreement is implemented.
A second, world milk price
The report states that a world-price for extra milk, sold at much lower levels than Canada’s inflated price, could cure the situation. However, a Canadian trade lawyer and official said the plan was unlikely to survive as it would be deemed an illegal subsidy.
Source: DairyHerd