The Challenges of Quebec Milk

Challenges of Quebec Milk

At the grocery store, regular milk costs as much as orange juice. And twice as expensive as gasoline at the gas station. Yet Quebec has far more cows than orange and oil, right? Do Quebeckers, who devote one-sixth of their grocery spending to dairy products, get themselves?

It is the fault of supply management if consumers pay a butter for their dairy products, some observers say. This system, which has governed dairy production in Canada since the 1960s, is a brake on development in the age of globalization, they argue. It would also prevent small producers from embarking on adventure.

For others, there is no question of touching the quotas, which determine what quantities of milk a farmer can produce. If the products are so expensive at the grocery store, it is not the producers’ fault, but all those who get rich on their backs, they say.

In short, the devil is to the cows
On the producers side, happiness is not necessarily in the meadow. Over the past 10 years, 1,400 dairy farms have disappeared from the Quebec landscape. Certainly, throughout the world, production tends to concentrate in fewer farms, but with more animals. This is not the case in Quebec: farms are on average among the smallest in North America. And the succession does not jostle at the gate. In fact, the union of the milk producers of Quebec, the union representing the 5,900 dairy farms in the province, did not succeed in 2015 in filling the 12 places in its financial assistance program for the start-up of a new closed!

To explain their setbacks, producers point to the free trade agreements signed by Canada – with the European Union in 2014 and the Transpacific Partnership (TPP) in 2016 – that allow imports of more than Dairy products from abroad. They also denounce a flaw in the rules of international trade, which allows huge quantities of American milk to enter Canada as a new product, diafiltered milk.

“Even if we receive a good check for our production, there is no money to make with milk. It’s the transformation that pays, “said Patrick Soucy, 47, whose farm of Saint-Nicolas, near Quebec City, has 55 Jersey cows. He himself plans to make butter, cream and ice cream within five years and open his facilities to the agrotourism. In the meantime, it derives a third of its income from the sale of recognized genetic qualities of bovine embryos to Korea and India.

In the stable, her little brown cows are lying on sand, and are not tied. As soon as one of them feels the need to be milked, she goes to a corridor where she is patient while munching corn while the arm of the robot sticks to her udders. On the screen of his computer, Patrick Soucy follows the milking and immediately integrates the data to his management software.

This father of four has invested more than $ 400,000 in this milking robot this year. In total, he has borrowed more than a million dollars to reach his dream of having his own farm.

Early in the nineties, Patrick Soucy benefited from the financial assistance program of the Quebec Dairy Farmers. He set up a solid business plan and got all possible help imaginable. Before the robot gave him a little respite, the farmer, helped only by students from Université Laval, who was on probation, had to work from 4 to 11 pm each day. “I do this job passionately, not because it brings me back,” he said with a smile.

In Quebec, the production of one cow out of five becomes fluid milk, which is simply homogenized and pasteurized. The rest is processed, mainly cheese, cream, yogurt and butter. This milk is bought at 80% by three giants: the Agropur cooperative, the private company Saputo in Quebec and the Italian giant Parmalat. Small producers of fine cheeses, for their part, count almost “for butter”: they use only 0.5% of this process milk.

In Quebec, all dairy production is bought by the Milk Producers group, which pays the farmers and then sells the milk to the companies that market it. The price paid to farmers is set annually by the Canadian Dairy Commission, a crown corporation, based on a calculated calculation based on the average farm cost of the farms and the composition of the milk.

The price displayed at the grocery store, for its part, is set by the Québec government according to the price paid to producers by the Commission … but only for standard milks. To put it plainly, Quebec has no authority over the price paid by the consumer for lactose-free milk, with added omega-3, organic, long-life … or even for those whose packaging has a plastic cap ! The prices of these items are free, like those of all other dairy products.
And just as the price of gasoline at the pump does not directly follow that of a barrel of oil, the price of dairy products only partially reflects production costs. “They depend mainly on what consumers are willing to pay,” says Daniel-Mercier Gouin, professor of agroeconomics at Laval University in Quebec City.

However, milk production costs in Canada are among the highest in the world. In 2015, Canadian farmers received $ 71.50 per hectolitre of milk supplied by their cows, compared to an average of $ 46 (Canadian) for US producers, Daniel-Mercier Gouin calculated.

While in Quebec, farms have an average of 61 cows, in California and Texas, some have more than 30,000 cows. These producers make tremendous economies of scale in equipment and manpower, Milk at very low cost. The US authorities also grant generous subsidies to dairy farmers, for example by paying part of the fodder, denounces Bruno Letendre, president of the Quebec Milk Producers.

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