Dairy: Introduction Flashcards
What is the importance of dairy farming?
- increasing worldwide
- Canada & USA: highest yields/cow
- significant growth forecasted in South Asia & Africa
What is important about Canadian dairy production?
- gradual annual increase
- second largest animal agriculture sector (after red meat)
What does the Canadian dairy industry do?
- imports from USA, UK, NZ, Australia
- exports to USA, KSA, Australia, Kuwait
- genetic quality of Canadian Dairy Stock -> has genetic markets in USA, Spain, Germany, Brazil, & Australia
- 25% of Canadian beef is from dairy breed animals
How has herd size changed?
- herd size has increased
- Consolidation: fewer farms, fewer cows, larger & more efficient dairies
- total milk produced has increased
- > 4.5 fold increase in efficiency since 1967
What are the future demographics of the Canadian dairy industry?
- older producers
- what if major changes happen in QC? large proportion of the industry & smaller herds here
- potential rapid increase in herd size
What is the free-market system?
- price determined by supply & demand
- in NZ
- government subsidizes diary income
What is the supply-managed system?
- in 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
Where did supply management arise from?
producer groups
- response to market instability
- provincial boards had greater leverage
- only w/in province
- Canadian Dairy Commission (1969)
Why is managing the supply needed?
needed w/ large numbers of producers
what is an overview of the system of supply management?
- planned domestic production
- administering pricing
- import controls
What is the milk quota?
- the producer gains the right to sell a specified amount of milk for a pre-agreed price
- milk quota is calculated by production of butterfat
What are the types of quota?
- fluid: provincially controlled to meet the demand of fresh milk
- market share: federally set, provincially administered for manufacturing
How does supply-management work?
- producers pay to cover administration of system
- continuous quota: producers either in positive or negative credit (over or under production)
- # of credit days = (actual butterfat production - monthly quota)/daily quota
- > 0 positive credit days: no $$$
- > 15 negative credit days: cannot recoup lost credit days (lose quota)
Why are quota credits transferred?
- allows flexibility btwn producers
- maintains provincial production
- cannot transfer beyond legal limits
What are incentive days?
- occur when provincial milk supply low
- extra credits provided
- allow for increased production w/o running into positive credits