Recently, a Reuters wire service story became available to The Western Producer on how European dairy operators are struggling to remain profitable in a global market decline, just as the 30-year-old quota system that limited their output was dismantled, which is contributing to a global dairy oversupply.
Since the Canadian supply management system is under pressure because of Trans-Pacific Partnership negotiations, I published the story on Producer.com, tweeted it out, and within minutes received an interesting response on twitter from Chuck Penner of Left Field Commodities.
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The response was: “Two Words: New Zealand.”
Attached to his tweet was a graphic, based on information from the Food and Agriculture Organization of the United Nations, which showed the difference in overall growth in the dairy sectors of both the Canadian and New Zealand dairy sectors from 1980 to present.
The Canadian trend line showed a stable yet relatively flat growth, which would be expected in a supply managed system.
In contrast, the New Zealand dairy sector doubled its revenue since the mid-1990s.
Penner tweeted again: “Two more words: Lost opportunity.”
I responded to Penner’s tweet with a question:
@LeftFieldCR Do you think concerns Cdn dairy can’t compete with big USA dairy and Asian markets are too far away from #EastCdnAg are overblown?
His response:
@CDNag Won’t be easy and certainly some pain. But being locked into only meeting Cdn demand isn’t much of a future.
Canadian dairy producers are in a different market than New Zealand, but the idea of not having access to growing world markets shouldn’t be lost on efficient Canadian dairy, chicken and egg producers.
Canadian representatives at the TPP negotiation table face the dilemma: easier access to massive markets for commodities such as cash crops and livestock comes at a price that likely includes our supply management systems.
With the federal election underway, political parties seeking votes in agricultural areas should consider describing their vision on how the sectors currently operating under a supply management framework in Canada can actually benefit from access to growing markets through trade deals such as the TPP.
Or, if their vision doesn’t include growth in the agriculture sectors operating under supply management, at least be honest and start describing what the compensation packages are going to look like.
