The Future of the Canadian Dairy Industry’s Supply Chain Management is up for Discussion

The Conference Board of Canada released a briefing report in the summer that provides a good historical review of Canada’s dairy industry.  This industry’s supply management system was created in the 1960s and early 1970s, but prior to 1960 the industry was a supplier of dairy product exports to the United Kingdom and continental Europe.  Supply management was created to protect dairy farmers from excess production capacity for serving the Canadian market.  A lot has changed since 1960 and I guess you could say that supply management has been a real cash cow for dairy farmers in Canada.  Over the course of one-to-two generations, many dairy farmers across Canada have become very wealthy because of the federal policies to maintain milk prices and control production quotas.  If I was a dairy farmer I’d pay close attention to theTrans-Pacific Partnership trade talks that the federal government has entered into earlier this year.  This Partnership between its four founding members – New Zealand, Chile, Singapore and Brunei – is negotiating with six other nations: the United States, Australia, Peru, Vietnam, Malaysia and Mexico.

All rural economic developers should be aware of and following these trade talks as the effects of entering into an agreement will filter into their communities. Of particular interest for the rural, agricultural communities are the potential effects this agreement would have on the local agricultural industry.  Small dairy farmers would be most exposed to market volatility if dairy imports came into Canada and they could no longer sustain a livelihood.  To all rural economic developers out there, pay attention to the number of dairy farmers left in your community and to whom and where they are selling or buying their production quotas.