1 – Dairy Industry

Question 1

Dairy industry importance

Answer 1

• Increasing worldwide
  o Bigger developed class that demands dairy products
• **Canada (and US): highest yields/cows
• Significant growth forecast in South Asia and Africa
• India: ¼ of worldwide production and predicted to increase by 1/3 in next 10 years
• *global production: 887 million tonnes

Question 2

Canadian dairy production

Answer 2

• 9.6 million tonnes
  o Gradual annual increase
  o Growing organic milk and goat milk
• *Second largest animal agriculture sector (after red meat)
• 549 milk processing plants
• *QB is largest, then ON, western Canada (1/4)

Question 3

Where does Canada import milk from?

Answer 3

• IMPORT more than we EXPORT
  o Continually importing more but not exporting more
• US, UK, NZ, Australia

Question 4

Where does Canada export milk to?

Answer 4

• US, KSA, Australia, Kuwait

Question 5

Genetic quality of Canadian dairy stock

Answer 5

• 41% of total worldwide exports of breeding cattle and embryos
• EXPORT more than we IMPORT
• *25% Canadian beef is from dairy breed animals

Question 6

What are the genetic markets that Canada exports to?

Answer 6

• US, Spain, Germany, Brazil, Australia

Question 7

Herd size

Answer 7

• Consolidation: few farms, fewer cows
  o Larger, more efficient dairies (average 104cows/herd)
  o More milk produced
• *now at 27.3kg/cow/day: 4.5-fold increase in efficiency since 1967

Question 8

Herd sizes in the world

Answer 8

• Biggest in NZ (440 cows/herd)
• USA
• UK (due to FMD increased to 231 cows/herd)
• Western Canada (183 cows/herd)
• ON (100)
• QB (83)
• EU (13, some smaller countries bring it down)
• India (1-5 cows/herd)
• *harder to get quota in QB and ON=harder to join farms and land is more expensive

Question 9

Future demographics for Canadian dairy farms?

Answer 9

• Older producers (more over 60 and 50=half of the producers of Canada)
  o Less generational shift
• QB: large proportion of industry is smaller herds with older producers
  o More consolidation and increase in average herd size

Question 10

2 systems for ‘selling’ milk

Answer 10

• Free-market
• Supply-managed

Question 11

Free-market

Answer 11

• Price determined by supply and demand
  o Demand limited=prices increase
• NZ
• Government subsidies
  o USA: 43% dairy income
  o Australia: 56%

Question 12

Supply-managed

Answer 12

• Canada
• Milk production set to meet domestic needs
• Production controlled by quotas
• Price set to reflect cost of production: aims for a fair price for the farmer

Question 13

Where did supply management come from/why do we have it?

Answer 13

• Response to market instability
• Provincial boards had greater leverage
• Only within province
• Canadian Dairy Commission: 1969

Question 14

3 components of supply management

Answer 14

1. Planned domestic production
2. Administering pricing
3. Import controls

Question 15

Milk quota

Answer 15

• Producer gains the right to sell a specified amount of milk for a pre-agreed price
• *calculated by production of BUTTERFAT

Question 16

What are the different types of quota?

Answer 16

• Fluid
• Market share
• *combined for each farmer (ex. important in SK)

Question 17

Where is the one milk processing plant in SK?

Answer 17

• Saskatoon (Saputo)
  o Only does milk processing NOT fluid milk
  o Get fluid milk from other western provinces

Question 18

Fluid quota

Answer 18

• Provincially controlled to meet demand of fresh milk

Question 19

Market share quota

Answer 19

• Federally set
• Provincially administered for manufacturing

Question 20

How does supply management work?

Answer 20

• Producers pay to cover administration of system
• *continuous quota: either in + or – credit

Question 21

What is the equation for the # of credit days?

Answer 21

• # of credit days = (actual butterfat production – monthly quota) divided by daily quota
• > 0 positive credit days: not paid for extra milk
• > 15 negative credit days: cannot recoup lost credit days (ex. lose your quota)

Question 22

Transfer of credits

Answer 22

• Allows flexibility between producers
• Maintains provincial production
• CANNOT transfer beyond LEGAL limits
• *incentive days

Question 23

Incentive days

Answer 23

• Occurs when provincial milk supply is low (ex. in fall as cows that calved in spring are in late lactation and producing less)
• Extra credits provided
• Allows for increased production w/o running into positive credits

Question 24

Buying/selling quota: in SK

Answer 24

• Private sales: ENTIRE quota must be sold to a single individual
• No producer may possess >4% provincial quota
  o Natural disasters: prevents a bigger problem

Question 25

Transfer exchange in SK

Answer 25

• Operated by SaskMilk
• Offers to sell and buy at prices requested by producers
• Board establishes market clearing price
• Ex. October: cost $58,000/cow (1.4kg/cow)

Question 26

What is the future of supply management in Canada?

Answer 26

• Always a worry deregulation could happen
  o Obstacle: amount of quota! Would need to compensate.

Question 27

What happens when things become deregulation? (ex. EU in 2015)

Answer 27

• Subsidies were provided to farmers
• *prices get more volatile
  o Larger dairies can handle it more (cost per cow is lower, can get deals on fuel and feed)
• *decrease in number of dairies and more larger dairies

Question 28

What areas of dairy production are most important to control?

Answer 28

• Animal welfare
• Food safety
• Environmental impact
• Anti-microbial use

Question 29

proAction modules

Answer 29

• Food safety
• Animal care
• Biosecurity
• Environment

Question 30

Food safety in dairy

Answer 30

• proAction food safety module (hazard analyze critical control program: HACCP)
  o 4 modules
• *mandatory to produce milk
• *critical control points and objectives

Question 31

Critical control points in food safety

Answer 31

• milking treated animals
• cooling and storage of milk (need to write down T within 30mins of milking)
• shipping animals (especially if treated)

Question 32

What are the objectives of food safety?

Answer 32

• Prevent pathogens and pharmaceuticals from entering food supply
• Includes veterinary natural health products

Question 33

Milk quality testing

Answer 33

• Testing each pickup from farm
• Negative for vet drug residues and antimicrobial substances
  o Used to only be beta-lactams
  o List of what is being testing is NOT released
• Aerobic bacteria count: <50,000 CFU/ml
• SSC <400,000 cells/ml (get premium if it is lower!)
• Freezing point: <-0.525 (ensure no water has been added)

Question 34

Antimicrobial use and resistance

Answer 34

• *Significant changes/restrictions
• Extra-label use only with written veterinary directions (proAction food safety module)
• Antimicrobial resistance surveillance (CaDNetASR)

Question 35

Animal welfare

Answer 35

• Code of practice, proAction Animal Care and biosecurity modules
• Requirements and recommendations are laid out
• Various categories
• Formal welfare audits: scheduled and random

Question 36

Animal welfare categories in proAction

Answer 36

• Housing
• Feed and water
• Animal health and biosecurity
• Handling and shipping animals
• Staff training and communication

Question 37

Welfare audits

Answer 37

• BCS
• Hock score
• Knee score
• Neck Score
• Mobility score
• *sample size is based on size of dairy
• *green=good
• *yellow=recommended
• *red=required

Question 38

Dairy farming and the environment

Answer 38

• Efficiency is KEY! (higher production per cow=decrease GHG/kg milk)
• *proAction environmental module

Question 39

proAction environmental module

Answer 39

• Environmental farm plan
• Questionnaire on soil health, greenhouse gases, biodiversity, silage seepage, plastic waste
• Wastewater management
• Manure storage
• Soil nutrient management

Question 40

Carbon footprint in Canada: 1944 vs. 2017

Answer 40

• 1944: 24 million tonnes CO2 (3.6 GHG/kg milk)
• 2017: 11-14 million tonnes CO2 (1.3 GHG/kg milk)