Canada by cross border shoppers leaving many to ask why?
of worms and some are looking to capitalize on the debate. Conservative leadership hopeful Maxime Bernier may have be caught between a rock and a hard place. Bernier suggests that supply side management should be scrapped. A comment that is sure to please one group of dairy farmers close to his base of support. Those in Quebec. As it stands today eliminating supply side management prac- tices in Canada would permit the Quebec farmers to dominate the Canadian market. They already produce over 50% of Canada’s supply and could easily wipe out smaller producers elsewhere in the country by ramping up. Producers also use their milk quota as collateral for loans to expand their operations. If there was a buyback program and wide open market many would simply sellout because they could not survive. Elimination of a regulated supply side manage- ment program in Canada has in the opinion of many been the only barrier between a national program versus centralized production in Quebec and a few other areas. The whole dispute has opened a can of worms and some are looking to capitalize on the debate The concept could also complete- ly open the borders to increase competition. Consumers have long challenged the retail price differ- ence in milk, cheese and other dairy. Products in Canada are much more expensive. A gallon of 1% milk in Bangor ME sells for $3.39 while just across the border in Fredericton NB the same basic size container is $6.19 at the grocery store. The same is true for cheese prices. That is why there are strict regulations on how much dairy can be brought back into
There is logic in the rationale of the Canadian producer as it relates to diafiltered milk and cheese pro- duction rules enforced last year. Unfortunately for them, as it relates to prices controls, government subsidies and import restrictions they are down to one leg on their 3- legged milking stools as there is significant pressure to change the dairy system. Bipartisan support from the gov- ernment of our biggest trading partner and domestic
pressure from internal government forces may prove too much for those pushing back on realignment. 2017 will be a nervous year for the Canadian dairy farmers.
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MAY 2017 • SPOTLIGHT ON BUSINESS MAGAZINE
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