You know there's trouble brewing when the mainstream media cover agricultural issues. From the Montreal Gazette an editorial:
Dairy farmers make suckers of consumers .
Canadians are drinking 18 per cent less milk than they did in 1980, consuming 30 per cent less butter and 24 per cent less ice cream. Cheese production is barely holding steady. The Canadian dairy herd has dwindled.
Sounds like a disastrous portrait of a collapsing industry, doesn't it? In fact, these realities are all the result of careful manipulation of the dairy industry by federal and provincial governments and dairy producers themselves.
I'd put less emphasis on the government and more on producers. I can't imagine how scary a free-market system must look to these guys.
This systematic conspiracy against consumers goes by the name of "orderly marketing," and it has resulted in an average profit margin for dairy farms of 25 per cent of operating revenue, almost double the figure for all farms in Canada.
First I've heard supply management called "orderly marketing" but I've kinda been out of the loop. One could argue whether that 25% profit margin makes dairymen wealthier or those of us in the other sectors just twice as poor.
This time the Canadian Dairy Commission is raising the price for "industrial" milk, which is used to make butter, cheese, yogurt, ice cream and more. This increase, at a time when market conditions should be generating lower prices, will echo through the whole food chain.
Meanwhile Quebec's Regie des marches agricoles et alimentaires, acting at the request of the province's dairy producers, has decreed an increase of six cents a litre in the minimum and maximum consumer prices for table milk. So the price of almost all dairy products will be climbing again.
This is a classic example of cartel economics, made legal - we won't say legitimate - because politicians allow it. Tariff walls as high as 300 per cent give Canadian producers a captive market, while consumers pay inflated prices for basic food items. True, some of the decline in consumption of these products comes from demographic change; we have fewer children now, and more newcomers from places where milk products are not a big part of the diet. But some of the decline in consumption is linked to inflated prices.
Diet fads haven't helped dairy consumption either. As a consumer I still find table milk affordable - for a premium product. I've drank New York state milk and believe me we do get a premium product. Same can be said of butter. I'll gladly pay the extra. And so would the rest of the world I bet if they had access to our cheese and dairy products. (shameless self-promotion
here )
Systematic conspiracy? Farmers making suckers of consumers? Well, that is just over the top.
From my experience dairy farmers would just like to be able to pay for their kids dental work.
Which makes me wonder if whoever wrote this has a benefit package or has actually met a farmer.
I don't even want to think about the havoc to come from the dismantling of supply management. Compensation for the millions tied up in quota alone is mind boggling. Dairy farmers have every reason to be reluctant. But perhaps American protectionism isn't one of them if we take
a lesson from history.Walker began selling his whiskey as Hiram Walker's Club Whiskey. It became very popular and American distillers became angry, and forced the US Government to pass a law requiring that all foreign whiskeys state their country of origin on the label. This move backfired; Hiram Walker's Canadian Club Whiskey became more popular.
CC is the best selling Canadian whisky brand outside of North America and it isn't even the
best we produce. I would sure love to be that optimist about the Canadian dairy industry.
H/t
Bourque