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Re. Dairy market uncertainty (Castanet, Feb 12)
The article expressed uncertainty about the dairy industry due to impending tariffs by the U.S. on Canadian products.
Canadian dairy farmers must hold a license to sell milk in Canada. This license is controlled by the Canadian Milk Supply Management Commission, with different regions determining who receives the quota and the amount of each quota.
The Canadian Dairy Commission determines the price of milk in Canada. That results in a total monopoly by the Canadian Dairy Commission on control both quantity and the price of milk in Canada, with no competition among dairy farmers to strive for efficiency.
The average net income of a dairy farmer in 2022 was $246,264 versus $132,000 for a grain farmer in the same year (Statistics Canada). An open market with no quotas would result in increased competition, eventually weeding out the inefficient producers and reducing the price of milk substantially, with a subsequent lower price of milk for the consumer.
The same scenario is true for poultry and egg producers.
Ron Dust
