Advantages of Supply Management

Price and supply stability allow dairy farmers to get a fair, predictable return while minimizing the impact of dairy product costs on the average Canadian.

  • Canadian dairy farmers get a fair market price for milk, roughly 50% of the price paid by consumers (compared to 20% for US farmers).
  • Canadian dairy farmers don't have to rely on government subsidies or taxpayer dollars to make a living.
  • Unlike farmers that do not have supply management (pork or beef in Canada, other sectors outside Canada), Canadian dairy farmers have a chance to cover their costs and make a reasonable profit (about 4-5%) if they are efficient. In contrast, pork farmers, have faced average profit margins of -1 to 1% in the past decade.
  • Stable income for farmers means they can invest in long-term quality care, feed, housing and equipment to preserve the health and comfort of cows and calves. Over the years, Canadian dairy farmers have invested in improving dairy cow genetics; the Canadian Holstein is renowned worldwide for its health and milking capacity.
  • Transportation of milk from farm to plant is centrally planned to minimize costs.

Processors are assured a stable and predictable supply.

  • They know how much milk they will get every day, as well as the price they will pay for the milk year-long.
  • This kind of predictability is like a low-risk insurance policy. It allows them to plan and invest in their plants and equipment to keep producing the quality dairy products Canadians expect.

Consumers have access to a variety of local, quality, 100% Canadian milk products at affordable prices year-round.

  • During the last few years, retail prices around the world increased really fast when world food prices increased because of the food crisis. The fall in farm prices were not completely reflected in retail prices before production prices increased and caused retail prices to increase again!
  • Meanwhile, farm and retail prices in Canada have remained stable.
  • Retail prices in Canada remain reasonable. For example, most consumers buy milk in a 4-litre format – paying about $1 to $1.65 a litre, depending on store banner and location in Canada. Meanwhile, New Zealanders, despite their farmers receiving generally lower prices than Canadian farmers, pay about $1.35 to $2.00 / litre. Farm prices also vary much more in New Zealand: for example, they have increased about 25% in the second half of 2010.
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