[ ROLE OF P5 QUOTA COMMITTEE
Panel shares what they look at when considering market needs and quota requirements
A
panel of representatives from the
P5 quota committee was asked to
provide responses to three important questions on past and current market
trends. The panel included Murray Sherk,
DFO board member; Reint-Jan Dykstra,
Dairy Farmers of New Brunswick board
member; Gerrit Damsteegt, Dairy Farmers of Nova Scotia board member; Denis
Morin, Les Producteurs de lait du Québec
board member.
1. Do you believe butterfat demand is
currently being met? If no, what options
are available to meet this demand in the
short‐ to mid‐term?
Murray: It’s pretty evident we are not
meeting demand and not growing butter
stocks. Also, the situation with excess skim
was certainly a learning curve. If we learn
to deal with it (excess skim) then we can
issue more quota to producers.
Denis: The tools we have allow us to forecast
production, but many elements are beyond
our control. The quota committee takes
this issue seriously, which affects about
10,000 producers in the P5. Consider the
fact we had to import butter, it’s clear we
weren’t meeting demand for butterfat.
Gerrit: The last couple of years have been a
challenge for the committee to know what
decisions to make. Yes, we can produce
more milk, but do we have enough
flexibility in the system? We probably
should have made some decisions sooner.
Looking forward, we have to make sure
we build butter stocks to a certain level;
we have an obligation to serve the market.
Yes, we’re filling the market now, but is
butterfat getting to the processors who
need it?
Reint-Jan: Demand was outstripping
supply, so it was easy to say increase quota,
but then we hit the proverbial brick wall.
We faced many unknowns, which became
a real guessing game. We have tremendous
insight from various economists, which
leads to our decisions on the committee.
Dealing with certain issues, such as
overproduction, means we have to balance
and weigh our decisions. We understand
the frustration from producers, but the P5
quota committee has to make decisions
that affect everyone.
2. What conditions do you think need to
be met to increase the amount of quota
issued to producers?
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APRIL 2016 | MILKPRODUCER
Gerrit: If there is no place to send skim
milk then what? We need more processing
capacity to be able to serve the Canadian
market.
Denis: It takes collaboration from the whole
industry. We experienced unprecedented
demand. Border control is another issue.
If we can’t control the increasing level
of imports, we can’t signal to producers
how much to produce. Diafiltered milk is
also an issue and the government has to
take a position on this because it affects
the entire industry. We can’t continue to
function in an industry with borders so
porous. We are lobbying on this issue. I
invite you to put pressure on your MPs. If
we want supply management to work in
the future, we have to act on this.
Murray: Import controls regarding protein
are not there. We need to be innovative
in how we deal with skim milk after
it’s dried. Right now, we are shipping
it to hog farms, but this is a short-term
solution. We need to produce as much
Canadian butterfat as possible. We don’t
want processors looking elsewhere for
their butterfat needs. Implementation of
the ingredient program will go a long way
to addressing these issues.
Gerrit: Our processing sector is doing
what it needs to be profitable; we also need
to do the same.
3. If production is too high to be able to
manage surplus skim milk disposal associated with butter manufacturing leading
up to or in the summer 2016, should measures be taken to decrease milk production?
Denis: This is a difficult topic to address.
We need butterfat and we need to rebuild
butter stocks. As long as we are able to
recover butterfat to make butter, we won’t
lose sleep. Production looks healthy now. If
we’re going to throw away whole milk then
we will have to revisit our strategy.
Murray: If we have to trim supply we
should firstly implement an over-quota
penalty and then secondly limit the usage of
underproduction credits for a few months.
Gerrit: We want to make sure everyone can
ship milk. We should firs