Dairy farmers should consider lowering their prices to compete with growing imports of cheap cream replacements.
That’s the opinion of Bruce Beattie, a Sundre, Alta., farmer and a director of Dairy Farmers of Canada.
In remarks to the annual meeting of Manitoba Milk Producers, Beattie acknowledged he was “stepping out on a limb” by suggesting a discussion on the issue. But Beattie said something must happen to staunch the slipping market of Canadian cream made into ice cream.
“We’re losing that market. Is there any way to retain it?” said Beattie.
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Butteroil-sugar blends started to become an issue in 1998, he said, when exporters realized Canadian import laws did not classify the blends as dairy products. That meant the highly subsidized products could come into Canada without tariffs, said Beattie, and take market share away from Canadian cream.
This year, processors imported more than seven million kilograms of butteroil-sugar blends by the end of October, more than one million kg than they had imported by the same time last year.
Estimates vary of how much the imports hurt dairy farmers.
The Canadian International Trade Tribunal said in 1998 that the imports would cost dairy farmers as much as $64 million. But dairy farmers have said damages can approach $381 in lost revenue and more than $1 billion in quota.
For two years, Dairy Farmers of Canada launched a major lobbying effort to get the federal government to change its tariff wording so butteroil-sugar blends would be taxed at the same rate as other dairy imports.
But the government referred the matter to the tribunal, which ruled in April 1999 that the products could continue to enter Canada without tariffs.
Dairy Farmers of Canada appealed the ruling to Federal Court, and vowed it would not concede the issue, even if it lost. The matter is ongoing.
Beattie said promoting high quality, higher priced ice creams that don’t use the cheaper butteroil-sugar blends might be one way for dairy farmers to regain some market share. But he wondered whether promotion would be enough.
“If you talk to consumers today, price is everything,” he said.
“The only way for us to look at that market is some sort of pricing (strategy).”
Beattie stressed the opinion is his own, and not the policy of dairy farmer groups.
