APRIL 2019 • COUNTRY LIFE IN BC
21
Future looking bright for BC dairy producers Quota increases, market growth and strong fluid milk sales all factors
by DAVID SCHMIDT ABBOTSFORD – There was
plenty of good news for producers at the BC Milk Marketing Board spring producer meetings, held across the province in early March.
BCMMB chair Ben Janzen noted the board issued another 4% quota increase at the beginning of February. “It’s a good way to start the
new year,” Janzen said. The nearly last-minute allocation is a result of the Canadian Dairy Commission’s new quota allocation model. Because the new model calculates milk requirements on a monthly basis rather than on a rolling annual basis, quotas will become more volatile in future and could drop as quickly as they go up. However, the CDC’s forecasting model shows the country continues to be underallocated so it is likely there will be additional quota increases in the near future. Despite a plethora of quota increases, total Canadian quota has not met total requirements for at least the past two years, although the gap between total quota and total requirements is lessening. Janzen said the CDC
expects the market to grow by another 5% this year. Although 2% growth is needed to cover the additional imports allowed by recent trade agreements, that still leaves 3% growth for Canadian producers. Janzen said the additional production should not have a
significant impact on the blend price. He noted the world price has been increasing so Class 7 milk is contributing more to the blend price than it has in the past. As a result, the blend price has risen recently, reaching over $84 a hectolitre in the last three months of 2018. “We averaged $80.05 per hl in 2018 compared to about $79 per hl in 2017,” Janzen reported.
Nor should the additional
production result in a lot of skimming as processing capacity has increased in the West in the last few months. However, just about all of that increased capacity is in Manitoba and BC, which means more interprovincial milk movements. Transport is something all producers in the Western Milk Pool must pay for. Janzen told producers to
expect more of that in future. “We need to attract the big plants and they won’t build them in every province. That’s the reality of doing business,” he says.
The increased capacity means conventional milk processing reached an all- time high in BC in January. January also saw strong fluid milk sales, much higher than is traditional in January. That’s good news for producers since milk going into the fluid market commands a much higher price than milk going into the industrial market. One area of concern is the
fact no processor in Western Canada is producing Fairlife or any other fortified or ultra-
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high-filtered milk. Although they still represent only a fraction of the milk market, demand for these products is growing so the milk board is putting extra effort into “getting someone to build a plant to make those products in BC” rather than have them come in from Eastern Canada or the US. The board also announced that the first eight applicants for its revised new entrant program were drawn from among 95 applications in early February. In June, a seven-person selection committee will interview and rank the eight applicants and select three to receive new entrant quota. Those three applicants will then have until December 31, 2020 to start producing milk.
In future, the board will use the same process to select six new entrants every other year beginning in 2020. Eligible applicants who were not drawn one year may enter a future draw. “There is no wait list
anymore,” Janzen said. BCMMB policy and
industry affairs director Zahra Abdalla-Shamji said the board is consulting with producers and the Farm Industry Review Board on expanding the list of off- exchange, assessment-free farm transfers to include long-term employees. Over 70% of BC’s 473
registered producers are structured as corporations and they want to be able to bring non-family members into the company to enable more orderly succession and/or reward valued employees.
Abdalla-Shamji said including non-family members among eligible transfers should help to sustain and renew existing farms. The board wants to allow transfers of up to 49% of shares to senior employees who have been with the farm for at least five years. She stressed that any such change in policy needs to be pre-approved by FIRB. She also said the BCMMB is
working with the other three provinces in the Western Milk Pool to develop a product
liability insurance program for all WMP producers. “The WMP is looking at one
plan coverage,” she says, telling producers it “makes sense” to have that kind of insurance. Producers naturally balked
at having to pick up the tab for more insurance, suggesting there should be more thorough testing to ensure tainted milk doesn’t get into the system in the first place. However, the board countered that testing for every possible contaminant is not a viable option given milk’s perishability. “We are talking to several insurance companies and hoped to have something in place for August 1 but that’s not likely,” Abdalla-Shamji says.
BCMMB general manager
Robert Delage said the board is close to rolling out its new milk management system. “This project has taken
several years,” Delage admitted, noting “nothing in our industry is simple.” The new IT program is now in its final testing stage and results are good, Delage said. When it is implemented, it will feature new producer statements and online quota buy/sell applications. Delage promised staff will conduct local workshops and webinars to train producers on how to understand and use the new system.
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