jump to example.com

Canadian milk pricing strategy shuts out U.S. dairy farmers

milk dairyIn 2016, U.S. dairy farmers saw the value of milk fall to its lowest level since the recession. Now they’re facing the additional challenge of Canada’s national ingredients strategy.

Designed to make Canadian milk more competitive and U.S. milk less so within Canada, the move has displaced many U.S. dairy farmers and businesses accustomed to supplying the Canadian market with ultrafiltered milk.

As a direct result, some U.S. dairy manufacturers recently communicated to their dairy farmer suppliers that they had lost business in the Canadian market, an American Farm Bureau Federation market analysis noted. “These farmers need to find a new marketing arrangement or processor for their farm milk,” the analysis explained. “Finding a home for this displaced milk is proving to be a tall order as the U.S. milk supply continues to outpace processing capacity in some regions.”

Ultrafiltration retains the proteins in milk while separating out lactose, water and minerals. It creates a concentrated dairy ingredient that can be used when making cheese.

Canada maintains strict tariffs and import quotas on dairy products and a milk supply management system that prices raw milk based on end use. The price of milk used for further processing is based on international dairy commodity prices.

Under that system, the price of Canadian milk typically has been higher than the price of milk in the U.S. That price difference, along with the U.S. proximity to Canada, made U.S.-produced milk proteins a competitively priced input for Canadian cheese processors.

About a year ago, Ontario implemented a new milk pricing program that “will include skim milk solids in all forms that can be used as ingredients, including but not limited to skim milk, skim milk powder, ultrafiltered and diafiltered milk, whole milk powder and condensed or evaporated milk (not for retail).” The price for that milk is based on international prices of milk products, effectively dropping the price of milk to Canadian processors, and cutting into the well-established market for U.S. milk protein. Other Canadian provincial governments adopted the program earlier this year.

In 2016, U.S. milk production increased 1.8 percent to more than 212 billion pounds, and hundreds of millions of pounds of milk were sold at steep discounts, dumped or used as animal feed.

Last year the U.S. lost 1,725 dairy farms due to surging milk supplies and lower dairy commodity prices. Industry stakeholders are working to find processors for the displaced milk and have requested that the USDA purchase dairy products and absorb them into nutritional aid programs.

“Longer term, until new processing facilities come online the U.S. will struggle to balance the increasing milk supply with demand,” the AFBF analysis noted. “New market opportunities … and improvements in existing trade agreements are necessary to grow demand for U.S. dairy products as well as provide for stronger trade dispute settlement mechanisms.”

Tony Banks, a commodity marketing specialist for Virginia Farm Bureau Federation, said the Canadian pricing strategy will have an impact in Virginia despite the commonwealth’s distance from the northern border. “The loss of the Canadian market for U.S. milk products will definitely have a ripple effect on farm milk prices here. Virginia dairymen will face continued pressure on milk prices as a result.”


Another new poll gives Northam big lead in Virginia governor race

One Virginia governor race poll released yesterday had Democrat Ralph Northam and Republican Ed Gillespie tied.

Poll: Trump unpopular in Virginia

President Donald Trump is well under water among Virginia voters, according to new poll results released by the University of Mary Washington.

UVA alum Chris Long to donate first six NFL game checks to fund scholarships

The Chris Long Foundation announced today that Philadelphia Eagles defensive end Chris Long will donate his first six game checks of the 2017 NFL season to fund two scholarships in his hometown of Charlottesville.

Events Calendar

Upcoming events in the Shenandoah Valley, Central Virginia and statewide from the Augusta Free Press Events Calendar. Don't see your event listed? Email augustafreepress2@gmail.com.

Game Preview: VMI, Chattanooga look to get back on track on Saturday

VMI knew the 2017 football season was going to be a rebuilding year. Chattanooga, coming off a playoff appearance in 2016, had its usual high expectations.

Game Preview: UVA has a chance at Boise State

Vegas and the ESPN Power Index don’t give UVA much of a chance to win at Boise State on Friday night.

Street Knowledge with Chris Graham: First look at UVA-Boise State

Chris Graham and Scott German take a first look at the UVA-Boise State game set for Friday night.

The Petty Hearts bring Tom Petty tribute to Wayne Theatre on Sept. 22

Tom Petty tribute band The Petty Hearts are coming to the Wayne Theatre on Friday, Sept. 22.

Web Design, Marketing

Augusta Free Press LLC provides clients in the Shenandoah Valley and Central Virginia and beyond with marketing and PR solutions including web design, TV/radio, social media and overall marketing campaign design and implementation.

Recent Posts
Your One-Stop Media Shop
Augusta Free Press LLC provides clients in the Shenandoah Valley and Central Virginia and beyond with marketing and PR solutions including web design, magazine/brochure, TV/radio, social media and overall marketing campaign design and implementation.
  • Web Design

    You want a new website, but don’t have the first clue as to how to build one. That’s our job. We take care of all facets of web design – visual design, layout design and content development. Get your business online for as little as $1,299.
    Learn more about AFP Web Design services.
  • Graphic Design

    The staff at Augusta Free Press Publishing has been recognized by the Virginia Press Association for excellence in layout and design. Whether you need a fresh business card design, rack card, ad, flyer or full magazine design, we can help with all your graphic-design needs.
    Learn more about AFP Graphic Design services.
  • Marketing

    Augusta Free Press manages advertising campaigns for small- and medium-sized businesses across Virginia. You don’t need to hire a full-time marketing coordinator. Bring the experience of the Augusta Free Press team to work for you – for a fraction of the cost.
    Learn more about AFP Marketing services.