1. Canadian Dairy Outlook Ron Versteeg CIPLE September 2011 Argentina

2. Dairy Farmers of Canada Annual Policy Conference February 2010 2 34 million Canadians Source: Statistics Canada 9.2 million km 2 United States: 312.1 million Americans

3. Canadian Population of Dairy Cows 3 1 million cows US: 9 million cows

4. Economic impacts of the Canadian dairy industry - 2009 Sustains 215,103 jobs Adds $15.2 Billion to GDP $3 Billion in tax revenues: $1.8 billion - Federal $0.9 billion - Provincial $0.3 billion - Municipal 13,214 Farms 83.8 M hl (8.4 M tonnes) delivered $6.1 billion in sales 452 Processing plants $13.7 billion in sales EcoRessources, Feb 2011

5. Average Canadian Dairy Farm Average farm has 76 cows milking (vary from 20 to 1000 cows) One Holstein cow produces 9768 litres/year Employs three people (FTE) Overall: 93% Holstein cows 23 % free-stall barns 77% tie-stall barns 1% organic

6. DEMAND IMPORTS minus TOTAL QUANTITY TO BE PRODUCED Province X Prov. Z Province Y FARMERS Supply Management FARMERS ------------------------Individual quota----------------------------

7. Matching Supply and Demand? Supply management has 3 pillars : Match production to demand Establish a fair price for farmers Limiting imports on dairy products (through tariff-rate quotas)

8. Matching Supply and Demand Production is managed to meet demand of Canadian consumers This requires monitoring of Canadian market requirements and discipline by producers (quota) to maintain supply This provides fair and stable price to milk producers surplus production has no value Very little exports Price based on cost of production, ensuring farmers get fair share of consumer spending.

9. The Canadian Market Weather conditions 4 seasons that vary greatly (-35 to +35 in central Canada) Housing important BC weather influenced by ocean& mountains Estimate demand for dairy products Quota based on butterfat demand Seasonality has been removed from production Mature market Population growth is small and influenced by immigration (with different food habits)

10. Production is stable throughout the year

11. 3 dairy processors (Saputo, Agropur and Lactalis) own 15% of Canadian plants, buy close to 80% of farm milk Stability of supply – marketing boards direct milk to plants, based on their demand, plan milk truck routes. Processors not exporting, but have plants in other countries (ex: Saputo in US, Argentina) Dairy Processing in Canada 11

12. Consumption trend per capita Dairy productTrend Milk Cream Cheese Yogurt Ice cream Butter

13. Agriculture, a provincial jurisdiction – provincial marketing boards (farmer-controlled) Markets for products are national Canadian Dairy Commission has national jurisdiction: Determining price support Coordinate interprovincial trade of products (pools) Coordinates any export Regulatory Framework

14. Federal government Administration of imports (quota and tariffs) Regulations on labelling No direct financial payments to farmers But involved in green programs: food safety, research, animal welfare and transportation, biosecurity, traceability, etc. National programs related to these topics, as well as lobby and marketing activities done by Dairy Farmers of Canada (umbrella to provincial boards, not gov entity) Regulatory Framework