The Canadian dairy industry has taken a hit of close to $260 million in lost revenue during the past year and the president of Dairy Farmers of Canada says the best balm for that would be a legislated floor price for cull cows.
The income problem has been caused mostly by the collapse of cull cow prices and the end of dairy genetics exports because of closed international borders in the wake of a Canadian BSE discovery in May 2003, New Brunswick dairy producer Jacques Laforge told the House of Commons agriculture committee Oct. 28.
Read Also
U.S. loses out on sales of soybean to China
U.S. soybean exporters risk missing out on billions of dollars worth of sales to China this year as trade talks drag on and buyers in the top oilseed importer lock in cargoes from Brazil.
Twelve-month losses are $419 million and government programs have replaced just $157 million of the loss.
“Recognizing that all of the government’s announced programs represent market intervention, the clear solution from DFC’s perspective is for government to intervene more efficiently in the market to set a minimum price for cull cattle,” said Laforge. “This would be the most effective and least costly way to correct the market failure that is evident.”
The idea drew fire from the Canadian Cattlemen’s Association and a government official.
CCA president Stan Eby, appearing at the committee before the dairy lobby, said the idea of a floor price has been rejected.
“The problem is it doesn’t get any more animals through the system,” he said. “We could set a price but does it get any more animals through the system? In reality, a floor price becomes a ceiling price on things.”
Prince Edward Island Liberal Wayne Easter, parliamentary secretary to the agriculture minister, said the idea is impractical.
“I do have a problem of how do you make floor price work,” Easter told Laforge. “I think it is impossible to make it work.”
The dairy industry leader was undeterred. He said the program could work.
He said the sale of cull cows and genetics often are the profit margin for dairy farmers. On his own farm with 100 milkers, the value of his inventory has dropped 80 percent or more from the pre-BSE estimate of $200,000.
Laforge said if there is not a floor price set for cull cows, pressure will grow for additional government financial help.
