Manitoba dairy farmers have turned up their noses to export opportunities offered by processors.
“We’re a little bit surprised that producers aren’t taking advantage of the export contracts,” said Bill Swan, chair of Manitoba Milk Producers.
Since August, 40 contracts have attracted only 200,000 litres of milk per month, less than one percent of Manitoba’s total monthly production of 24 million litres.
Swan said export values averaged $25 per hectolitre (25 cents per litre), about half the value producers get for regular, in-quota milk production.
But export values are much higher than the alternative market for over-quota milk, he said.
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In November, farmers delivered 450,000 litres of over-quota milk, he said. A 1999 World Trade Organization ruling means unplanned, over-quota milk goes into low-value products like animal feed, netting producers $6 per hL (six cents per litre).
The same trend has happened in Alberta, Ontario and Quebec, said Bruce Beattie, a Sundre, Alta., farmer and director of Dairy Farmers of Canada.
Dairy farmers have to recognize that options for over-quota milk are limited, said Beattie.
Swan said some farmers have shied away from export contracts because they think the policy may undermine the supply management system. But producing over-quota milk may have more serious and immediate impacts on the system, said Swan.
Provinces producing more than one percent over quota in the course of a year will be responsible for paying a processor to turn over-quota milk into animal feed. That can cost as much as $30 per hL, a cost all farmers will share through a diluted price.
Farmers don’t have to sign export contracts, Swan said. If they want to produce more milk, they can buy more quota. Or, they can cull cows to ensure they meet their targets.
Manitoba Milk Producers has held meetings with farmers in the Interlake region to talk about the new export system.
The board plans to talk to more small groups around the province in coming months.
