A global recession and collapse in international milk prices have reduced exports of Canadian dairy genetics.
Strong customers like the United States and Mexico do not need replacements as domestic and international milk prices falter. The U.S. has been slaughtering dairy cattle to reduce its national herd in response to poor prices.
“The result is there have been fewer dairy exports to the United States in 2009 and into 2010, it is really, really low. They have got an oversupply of milk and an oversupply of animals. They have been taking animals out of their system,” said Rick McRonald of the Canadian Livestock Genetics Association.
Read Also
Canada’s simplified BSE testing program shows good uptake
Going by the number of submitted material samples so far, cattle producers’ response so far to an updated national surveillance program for BSE is encouraging for Canada’s CFIA.
Canadian dairy genetic exports reached $177.8 million in 2008, representing an increase of 73 percent over the previous year. International exports of live animals have been restricted since 2003 when BSE closed borders.
Figures for 2009 are not yet available but McRonald expects all sales to be down considerably.
Mexico was expanding its dairy herd and when the world milk price was high, processors wanted more of the domestic product because it was cheaper.
Now producers are struggling because there is no shortage of milk. There are cheaper imports, the domestic price is low and they cannot get financing to buy cattle.
“The dairy industry in Canada has its challenges but it is in really good shape compared to others. It is really an island in this great sea of financial woe that agriculture in general is in,” McRonald said.
He hopes for improvement next year but knows of no large contracts for international sales. Milk prices may return to profitability later this year so sales may rebuild.
In the meantime, the association continues to work on promoting and selling genetics with help from a $1.22 million investment from the federal government.
The AgriMarketing program is a four year $88 million initiative for Canadian producers and processors to increase exports and build long-term international market development programs.
The money is part of an ongoing program for international market development initiatives to sell dairy cattle as well as embryos and semen exports around the world through the livestock genetics association.
This grant covers the period from April 1, 2009 to March 31, 2010 and is part of a larger $8 million program the association operates.
