Canadian dairy sector thrives, while agriculture minister dismisses criticism from US dairy

By Mary Ellen Shoup contact

- Last updated on GMT

The dairy industry in Canada has proved to be a strong economic driver for the country with GDP reaching nearly $20bn in 2015. ©iStock/Modfos
The dairy industry in Canada has proved to be a strong economic driver for the country with GDP reaching nearly $20bn in 2015. ©iStock/Modfos

Related tags: Dairy, Dairy industry, Milk, Dairy farming

The domestic dairy industry in Canada has proved to be a strong economic driver increasing its GDP from C$15.2bn ($11.6bn) in 2009 to C$19.9bn ($15.2bn) in 2015, according to a new report from the Dairy Farmers of Canada titled “Update on the Economic Impacts of the Dairy Industry in 2015.”

The report showed that the Canadian dairy sector saw a 26% increase in dairy sales, 29% production increase, and 24% growth in processing activity since 2009, largely driven by the total number of dairy farms (11,700) the report recorded in 2015.

The surge in dairy industry activity within Canada means there are now 221,000 full-time jobs across the country associated with the dairy industry, a 3% increase since 2013.

While the dairy industry has decreased reliance on manual labor at the farm level, the number of jobs at the value-added processing level of operations has increased, the study noted.

Regional concentration

The recent report cited that the dairy industry is alive and well in all Canadian provinces with Quebec and Ontario being the home to the most dairy farms ­­-- 5,766 and 3,834 dairy operations, respectively.

Perhaps unsurprisingly, Quebec and Ontario continue to lead the country in milk production as well.

In particular, Ontario stands out primarily for its concentration of dairy processing. As a result, roughly 46% of the impacts from dairy processing are found in this province, compared to 32% of the impacts generated by production.

The opposite is found in Quebec, where 40% of the impacts from production are generated, compared to 30% of the impacts from processing. This is primarily due to the concentration of the manufacturing sector and, in particular, the dairy processing sector in Ontario. For instance, sales by dairy processing companies in Ontario reached C$7.6bn ($5.8bn) in 2015, compared to C$5.4bn ($4.1bn) in Quebec. In the other regions, the respective production and processing shares are similar to one another.

Canada agricultural minister ‘not one bit concerned’ by criticism

Canada’s thriving dairy sector has been met with criticism, however, especially from the US​, which believes that Canada is violating trade agreements by decreasing imports of US dairy ingredients.

Earlier this month, two US senators alleged that Canada’s National Ingredients Strategy and Ontario’s VI pricing program violated trade commitments the country had with the US by encouraging dairy farmers to purchase local milk products instead of US imports.

In response to the legal challenge from international dairy groups, Canada’s agriculture minister Lawrence MacAulay said he was “not one bit concerned” ​and that he was “never was very big on threats in my life,” ​at a press event before the Senate Agriculture and Forestry Committee last week.

The Dairy Farmers of Ontario also responded by saying that its ingredients strategy was put in place to drive value-added growth in dairy ingredients for both domestic and exports markets, in order to put the Canadian dairy sector in a more competitive positon.

And that it has: the Canadian dairy industry has contributed approximately $3.6bn ($2.7bn) in local, provincial, and federal taxes, proving to be a mainstay of Canada’s economy. 

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1 comment

11700 Dairy Farms

Posted by Erik Kennes,

The 11700 Dairy Farms is the total for Canada not additional farms since 2009 the overall trend in Canadan and USA has been fewer larger farms

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