Milk Concentrate Imports

[geoffrey]

There's something wrong here about the free market. The farmers in Ontario,who do not have marketing boards are going broke at an alarming rate. So much for free enterprise. When it cost more to buy the seed to put in the ground than they will get for it at harves time, there has to be something wrong.

Farmers have been blocking the food terminals here and putting thier tractors out on main highways and blocking the roads around the parliament buildings in Ottawa. The mad cow has destroyed a lot of beef farms and subsudized grain products from other countries are making it impossible for farmers to compete.

Something wrong with this scene.

No one addressed this. If the free market is so good why are the only farmers in Ontario able to make a living producing milk. Isn't there something wrong with this scene.

I'm confused. They aren't making money producing milk, they are being subsidized so they are on welfare.

The free market works like this. Areas specialise. Alberta can make milk cheaper so we make milk. Ontario can make cars cheaper, they make cars. We trade. It's the fundamental concept of comparitive advantage. Eastern farmers don't have a comparitive advantage over western farmers, so our western farmers can't sell all their product, and we all pay more money.

Stick to what Ontario can make money off of, and let Alberta and Saskatchewan (and BC too I think) make money on milk. We do it better, we do it cheaper.

[Technocrat]

Alberta simply cannot produce enough milk for the rest of the country. Milk is not a very stable product, typical shelf life is only 20 days. Grocery stores take milk off the shelves 5 days before the date code is due. Its a simple matter of numbers. You lose a third of your shelf life in transportation. Efficiency is lost. So much for specialization. Not to mention the added transport costs(so much for lowering emissions). Frankly im happier knowing that my milk didn't come from clear across the country.

I have seen no convincing evidence that Alberta can produce milk at a more economical level and provide for the whole of the nation. Hell even Alberta has a milk marketing board... so clearly there is a need for one.

[margrace]

geoffrey

I'm confused. They aren't making money producing milk, they are being subsidized so they are on welfare.

The free market works like this. Areas specialise. Alberta can make milk cheaper so we make milk. Ontario can make cars cheaper, they make cars. We trade. It's the fundamental concept of comparitive advantage. Eastern farmers don't have a comparitive advantage over western farmers, so our western farmers can't sell all their product, and we all pay more money.

Stick to what Ontario can make money off of, and let Alberta and Saskatchewan (and BC too I think) make money on milk. We do it better, we do it cheaper.

Margaret

Just a minute,my knowledge of producing milk and its costs which I have quoted come from my son in law who was milking 200 cows in the Okanogan Valley of BC and my husbands nephews who have farms in the Beaverton area of Ontario. The cost are the same, the problems are the same, I don't know where you get your information. Do you know where your milk is produced in Alberta, just wondering. Go and talk to the farmers up at Red Deere

[Canuck E Stan]

[

No Canuk E Stan... there is not admission that milk is bad for you or whatever the hell your trying to read into what im saying. Milk & dairy products are very good for you there is a reason its one of the 4 food groups. Yes ther are alternatives... but there not for everyone. I personally can't stand the wannabe dairy products... imho their gross and don't even compare to the real thing. (soy also gives me uber stinky farts... ewwwwwww)

No one is forcing you to consume dairy products Canuk E Stan, but you can't deny the fact that they are a major component of most peoples diet. Equating milk with alcohol or tobacco is just plain weird... and frankly makes no god damn sense. Im going to read into what you seem to want me to say... would you like me to say that milk is the product of the devil? The first drop of milk that hits your tongue will make your heart explode?? Its part of a healthy diet... for gods sakes, its not part of a crazy fad diet.

You can eat all the soy products you like, but they have their own set of drawbacks. If you would think and be sensible, Im saying that overconsumtion of ANY FOOD, wether it be milk, soy, carbs, meat, fish can and in all probability will be detrimental to your health. A balanced diet is how you stay healthy, an unbalanced diet is how you get sick. Yeesh... can i make it any clearer? Wait Yes I CAN!

Interesting, rant, but get away from the milk and to the topic. Subsidies. Milk is NOT something special, it is just food.Food that can be subsituted with other food. Other foods that DO NOT get government handouts. Why should milk be treated differently? Bread is in the food groups,vegetables and fruits too. Which one of these items gets government handouts? Milk is NOT something SPECIAL.

[Technocrat]

Lol Canuk E Stan... silly silly. There is a wheat marketing board. Egg marketing board. Im pretty sure there are more subsidies then i care to know about. Milk is not the only ag sector that is subsidized. Most of the "basics" are subsidized. Milk is not special, its one of many basic food items that the Canadian gov't has deemed important enough to have a stable domestic supply.

[margrace]

Lol Canuk E Stan... silly silly. There is a wheat marketing board. Egg marketing board. Im pretty sure there are more subsidies then i care to know about. Milk is not the only ag sector that is subsidized. Most of the "basics" are subsidized. Milk is not special, its one of many basic food items that the Canadian gov't has deemed important enough to have a stable domestic supply.

Yes and the Ontario farmers are protesting outside the Prime Ministers home today.

[scribblet]

Lol Canuk E Stan... silly silly. There is a wheat marketing board. Egg marketing board. Im pretty sure there are more subsidies then i care to know about. Milk is not the only ag sector that is subsidized. Most of the "basics" are subsidized. Milk is not special, its one of many basic food items that the Canadian gov't has deemed important enough to have a stable domestic supply.

Lots of subsidies for sure. What would happen if all marketing boards and subsidies were lifted, in favour of a completely free market? Why should marketing boards control who can grow what and when?

[geoffrey]

Just a minute,my knowledge of producing milk and its costs which I have quoted come from my son in law who was milking 200 cows in the Okanogan Valley of BC and my husbands nephews who have farms in the Beaverton area of Ontario. The cost are the same, the problems are the same, I don't know where you get your information. Do you know where your milk is produced in Alberta, just wondering. Go and talk to the farmers up at Red Deere

I know two dairy farmers personally. They aren't all in Red Deer either. They both want to sell their milk cheaper, so they can sell more of it. They have a more competitive product, but don't have the freedom to sell it. I can't buy milk from them. It would actually be against the law for them to sell it at what they think is a fair price. Do you not see a problem with that?

Barichello and Stennes (2) show a sample of producers in Alberta to have a slight cost advantage over similar groups in Ontario and Quebec. Jeffrey (10) supports this conclusion and also shows Alberta producers to have an advantage over producers in neighboring prairie provinces. Both of these studies cite economies of yield and herd size as critical factors in the determination of Alberta's cost advantage, but do not account for many other cost determinants that have been shown to be equally important. As Romain and Lambert (14) demonstrate, individual producer efficiency is a critical factor in the explanation of differences in production cost among dairy producers in Quebec and Ontario. Their results show that a 10% improvement in technical efficiency can reduce cash costs by $4.10/hL in Quebec and $3.64/hL in Ontario.

Source: http://www.wcds.afns.ualberta.ca/Proceedin...96/wcd96333.htm

Alberta does have an advantage.

[Technocrat]

Not a bad article. It does show that albertan dairy farmers can produce milk cheaper. But thats only part of the equation. Transportation and proximity to market are also very important when you have a product with a relatively short life span(20 days for most fluid milk).

The production cost advantage advantage evaporates as soon as you take transportation into account. Its simply not economical to transport milk over long distances. Costs of transporting goods are increasing, the Albertan competitive advantage in production is lost at this stage. If alberta were say closer the the mass markets of canada then it would make sense to have alberta producing for most of canada.

As I stated before, the final price for a food item that you pay at a grocery store, incorporates the production costs, transportation costs to the processor, processing costs, packaging costs, distrobution costs, costs to the retailer, and all the margin and profits from each stage along the way as well. Proximity to market is why alberta does not produce milk for the rest of canada.

[margrace]

Just a minute,my knowledge of producing milk and its costs which I have quoted come from my son in law who was milking 200 cows in the Okanogan Valley of BC and my husbands nephews who have farms in the Beaverton area of Ontario. The cost are the same, the problems are the same, I don't know where you get your information. Do you know where your milk is produced in Alberta, just wondering. Go and talk to the farmers up at Red Deere

I know two dairy farmers personally. They aren't all in Red Deer either. They both want to sell their milk cheaper, so they can sell more of it. They have a more competitive product, but don't have the freedom to sell it. I can't buy milk from them. It would actually be against the law for them to sell it at what they think is a fair price. Do you not see a problem with that?

Barichello and Stennes (2) show a sample of producers in Alberta to have a slight cost advantage over similar groups in Ontario and Quebec. Jeffrey (10) supports this conclusion and also shows Alberta producers to have an advantage over producers in neighboring prairie provinces. Both of these studies cite economies of yield and herd size as critical factors in the determination of Alberta's cost advantage, but do not account for many other cost determinants that have been shown to be equally important. As Romain and Lambert (14) demonstrate, individual producer efficiency is a critical factor in the explanation of differences in production cost among dairy producers in Quebec and Ontario. Their results show that a 10% improvement in technical efficiency can reduce cash costs by $4.10/hL in Quebec and $3.64/hL in Ontario.

Source: http://www.wcds.afns.ualberta.ca/Proceedin...96/wcd96333.htm

Alberta does have an advantage.

They can sell more milk, all they have to do is buy more quota. All the other farmer had to buy theirs why should they be special

[geoffrey]

No, thats not how it should work. Everyone should be able to buy free market priced milk. Then Alberta farmers would be able to sell their efficient product to more people, as more people would rather spend less. Ontario and Quebec farmers would be forced to adapt, and fix their farms to be as competitive.

Doesn't make sense why there is a difference, other than an unwillingness to change. They won't change until they are forced to by a lower priced commodity.

[Technocrat]

Geoffery... it still would not matter... alberta would not be competitive because it is located geographically further from the largest markets in canada. Alberta may be able to produce milk at a lower cost, but the competitive price advantage is lost when transportation costs are factored in.

OK well make it real simple

Milk production in ontario cost < Milk production in alberta cost

Milk Production in ontario cost + processing costs + transportation to mass market < Milk production in alberta cost + processing costs + transportation costs to mass market

It is just not feasible to ship fluid milk over long distances.

I hope this illustrates why your position makes no sense.

[Riverwind]

It is just not feasible to ship fluid milk over long distances.

I hope this illustrates why your position makes no sense.

If it were that simple then there would be no need for trade restrictions since geography is a sufficient barrier.

[August1991]

It is just not feasible to ship fluid milk over long distances.

I hope this illustrates why your position makes no sense.

If it were that simple then there would be no need for trade restrictions since geography is a sufficient barrier.

Good point, Riverwind. In fact, the court decsion which started this thread concerns "Milk Concentrates" (whatever that is).

Butter and cheese are shipped around the world.

Alberta may be able to produce milk at a lower cost, but the competitive price advantage is lost when transportation costs are factored in.

I suspect that transportation is not the explanation why Alberta doesn't produce milk.

Albertan farms are better used for raising cattle for beef. This would be a classic case of comparative advantage. Alberta may be the best place in Canada for a dairy farm but to produce milk, Alberta would have to produce less beef. And Alberta is better off producing beef rather than milk. So, Alberta produces beef and imports milk even though Alberta has the best dairy land in Canada.

[geoffrey]

Alberta may be able to produce milk at a lower cost, but the competitive price advantage is lost when transportation costs are factored in.

I suspect that transportation is not the explanation why Alberta doesn't produce milk.

Albertan farms are better used for raising cattle for beef. This would be a classic case of comparative advantage. Alberta may be the best place in Canada for a dairy farm but to produce milk, Alberta would have to produce less beef. And Alberta is better off producing beef rather than milk. So, Alberta produces beef and imports milk even though Alberta has the best dairy land in Canada.

We are the 3rd largest producer of milk in Canada, produce more per capita than Ontario and Quebec. The problem is we can't sell it because Quebec milk sets the price level, so we get no new markets.

The fixed priced doesn't apply Techno if you truly believe that geography doesn't matter. If thats true, then thats even more reason to have a free market solution. Let Quebec sell at Quebec prices, if there is no competition outside Quebec, then everyone will be selling at the price anyways right?

[Technocrat]

"Milk Concentrates" is basically the dry milk components that you use to make some yogurts and many thickeners use it. You will see this listed on ingredients panel as 'milk ingredients'. I.e. powdered milk and that sort of stuff, which is easily transported.

My argument was more refering to fluid milk. BTW August transportation is one of the main reasons why, fluid milk is not shipped across the country. (Its part of my job to crunch these numbers).

"We are the 3rd largest producer of milk in Canada, produce more per capita than Ontario and Quebec. The problem is we can't sell it because Quebec milk sets the price level, so we get no new markets."

That stat means nothing. Alberta has arseloads of land and a pupulation less then that of the GTA. Even if you could produce it, who would buy it? You need a processor that is relatively close. Most dairy products cannot cross the Can/US border. So i guess you could sell it to BC, and Sask. but those markets are relatively small in comparison.

Lowering the price of the milk that you sell will not help you gain acess to new markets. The market is saturated, dairy consumtion is decreasing, and the large markets are realatively far away. Even if you could export your dairy products around the world your still competing agains countries with major subsidization and who are basically already dumping excess supply to the world market. Exactly where is the competative advantage?

[margrace]

Alberta may be able to produce milk at a lower cost, but the competitive price advantage is lost when transportation costs are factored in.

I suspect that transportation is not the explanation why Alberta doesn't produce milk.

Albertan farms are better used for raising cattle for beef. This would be a classic case of comparative advantage. Alberta may be the best place in Canada for a dairy farm but to produce milk, Alberta would have to produce less beef. And Alberta is better off producing beef rather than milk. So, Alberta produces beef and imports milk even though Alberta has the best dairy land in Canada.

We are the 3rd largest producer of milk in Canada, produce more per capita than Ontario and Quebec. The problem is we can't sell it because Quebec milk sets the price level, so we get no new markets.

The fixed priced doesn't apply Techno if you truly believe that geography doesn't matter. If thats true, then thats even more reason to have a free market solution. Let Quebec sell at Quebec prices, if there is no competition outside Quebec, then everyone will be selling at the price anyways right?

All that being said I still have two points, Canadians hate to have to pay for food, health and education. This is the main reason for this whole debate. Secondly the farmers in Ontario who are not milk producers are going broke at an alarming rate, they even protested at Mr. Harpers home the other day, slowing down traffic on embassy row.

When it cost $400 to seed and harvest an acre of corn and the selling price of the harvested product is $300 then there is something drastically wrong.

[Renegade]

When it cost $400 to seed and harvest an acre of corn and the selling price of the harvested product is $300 then there is something drastically wrong.

So why exactly do they stay in business?

Canadians hate to have to pay for food, health and education. This is the main reason for this whole debate.

Not quite accurate. Canadians (and everyone else) hate to pay more than they have to for food, health, education, real estate, cars, and everything else they buy.

[Canuck E Stan]

All that being said I still have two points, Canadians hate to have to pay for food, health and education. This is the main reason for this whole debate. Secondly the farmers in Ontario who are not milk producers are going broke at an alarming rate, they even protested at Mr. Harpers home the other day, slowing down traffic on embassy row.

When it cost $400 to seed and harvest an acre of corn and the selling price of the harvested product is $300 then there is something drastically wrong.

So what's the answer? Force the population to drink milk or keep the farmer on welfare subsidy.

How about the farmer adjusts to costs by changing the way he farms or where he gets his seed.

What's his solution,other than going to the government for handouts.

What's the answer?

[margrace]

All that being said I still have two points, Canadians hate to have to pay for food, health and education. This is the main reason for this whole debate. Secondly the farmers in Ontario who are not milk producers are going broke at an alarming rate, they even protested at Mr. Harpers home the other day, slowing down traffic on embassy row.

When it cost $400 to seed and harvest an acre of corn and the selling price of the harvested product is $300 then there is something drastically wrong.

So what's the answer? Force the population to drink milk or keep the farmer on welfare subsidy.

How about the farmer adjusts to costs by changing the way he farms or where he gets his seed.

What's his solution,other than going to the government for handouts.

What's the answer?

Canuke I don't know what the answer is, the car market is disappearing here in Ontario and yes all dealers are laying of 50% of their staff, including Honda. We are headed into a resession that will hurt everyone and just because you sell oil, you will have no protection either.

Small business will suffer the most.

[Canuck E Stan]

and just because you sell oil, you will have no protection either.

Small business will suffer the most.

I don't sell oil, wish I did. So farming is a small business?

How much government money do other small business get in the form of subsidies?

Small businesses who can't make it on their own, go out of business.

No government handouts.

[geoffrey]

Recession fears are completely unfounded right now anyways. It would take another NEP to hurt oil in Alberta, not this running out of domestic cars will create a recession complex, very bizarre. Demand for oil and oil products doesn't even decrease when gas is at $1.20 a litre. We still aren't at the breaking point yet for oil, and once it happens, it takes 10-15 years after to develop the infrastructure to support alternative fuels.

Small businesses who can't make it on their own, go out of business.

Very true. That's the way it works for everyone else but farmers.

[August1991]

This appears to be an issue between organic, raw milk and pasteurized milk but I think it puts into question the supply management system:

A hunger-striking Ontario farmer who ran afoul of decades-old legislation forbidding the sale of raw milk found himself at the centre of a standoff with police and public health authorities Tuesday when they surrounded a bus from which he sells organic food.

Michael Schmidt said he had parked his bus in a suburban parking lot north of Toronto when he found himself surrounded by a phalanx of police officers and public health inspectors. He refused to let police board the bus because they did not have a search warrant.

"They kind of stood around the whole bus for probably over an hour," Schmidt said. "Finally, they left."

The show of force came one week after Schmidt's farm near Durham, Ont., about 45 kilometres south of Owen Sound, was raided last week by Ministry of Natural Resources inspectors - a raid that has made him a cause celebre for those who favour natural foods.

He's also become a lightning rod for the anger of farmers who say they're fed up with heavy-handed bureaucracy.

CP

[August1991]

Rich Milk

Canadians are drinking 18 per cent less milk than they did in 1980, consuming 30 per cent less butter and 24 per cent less ice cream. Cheese production is barely holding steady. The Canadian dairy herd has dwindled.

Sounds like a disastrous portrait of a collapsing industry, doesn't it? In fact, these realities are all the result of careful manipulation of the dairy industry by federal and provincial governments and dairy producers themselves. This systematic conspiracy against consumers goes by the name of "orderly marketing," and it has resulted in an average profit margin for dairy farms of 25 per cent of operating revenue, almost double the figure for all farms in Canada.

...

This is a classic example of cartel economics, made legal - we won't say legitimate - because politicians allow it. Tariff walls as high as 300 per cent give Canadian producers a captive market, while consumers pay inflated prices for basic food items.

...

If milk producers were competing, rather than running an oligopoly, quality and choice would improve and prices would fall. Instead we have constantly higher prices and shrinking consumption - a system that benefits the few at the expense of the many.

As usual, consumers don't know how to fight back. One group that does, a little, is the Canadian Restaurant and Food Service Association, which operates an informative website called dairyplanet.ca, which claims that Canadian dairy prices are the world's highest.

Montreal Gazette

I have only two comments, other than the obvious.

First, as long as Quebec dairy producers have 50% of the protected Canadian market, Quebecers will never vote for independance.

Second, it will be the environmental practices of dairy farmers that will bring down this cartel.

[blueblood]

Rich Milk

Canadians are drinking 18 per cent less milk than they did in 1980, consuming 30 per cent less butter and 24 per cent less ice cream. Cheese production is barely holding steady. The Canadian dairy herd has dwindled.

Sounds like a disastrous portrait of a collapsing industry, doesn't it? In fact, these realities are all the result of careful manipulation of the dairy industry by federal and provincial governments and dairy producers themselves. This systematic conspiracy against consumers goes by the name of "orderly marketing," and it has resulted in an average profit margin for dairy farms of 25 per cent of operating revenue, almost double the figure for all farms in Canada.

...

This is a classic example of cartel economics, made legal - we won't say legitimate - because politicians allow it. Tariff walls as high as 300 per cent give Canadian producers a captive market, while consumers pay inflated prices for basic food items.

...

If milk producers were competing, rather than running an oligopoly, quality and choice would improve and prices would fall. Instead we have constantly higher prices and shrinking consumption - a system that benefits the few at the expense of the many.

As usual, consumers don't know how to fight back. One group that does, a little, is the Canadian Restaurant and Food Service Association, which operates an informative website called dairyplanet.ca, which claims that Canadian dairy prices are the world's highest.

Montreal Gazette

I have only two comments, other than the obvious.

First, as long as Quebec dairy producers have 50% of the protected Canadian market, Quebecers will never vote for independance.

Second, it will be the environmental practices of dairy farmers that will bring down this cartel.

I thought the reduction in the consumption of dairy products was a result of a change of culture (the advent of soy milk and margerine). I once again say good on the milk producers, they're using their heads. By uniting they are helping themselves out, in my view the dairy producers are getting a fair price and a fair wage for their work. If milk producers were competing in a true free market setting, over time the smaller producers would die out and we would get what I like to call the "Cargill effect" (buying out the smaller guys to the point where it is an oligopoly and the prices will in fact rise more than what is in place now, (look at the snowmobile industry over the last 40 yrs.) The guy writing this article is assuming that dairy farms would stay the same size and that the industry would remain "stagnant" This of course is not the case as the human tendency towards greed trumps this and we in fact get the Cargill effect. The author is either naive or living in a dream world. Sure opening up the market to full freedom will lower prices initially and opening it up to international producers will lower prices, but over time due to human nature, there will be a few huge companies that remain and we get the oligopoly again and inflated prices that would make the prices now look like a bargain. My question to you is which oligopoly do you want?

I don't know how much quebecers stand behind their dairy industry but if they seperate that industry is toast.

The high cost for environmental practices that would be tacked onto the cost of milk and anything else for that matter will be the end of the environment being #1 issue for Canadians