Another ANONYMOUS LETTER from a dairy farmer in Ontario highlighting the growing mess created by supply management. And it’s only going to get worse.
"Sylvain, thank you for calling out a misleading idea that Canadian dairy farmers are losing money. In fact, the dairy industry has made some decisions that are now backfiring.
A few years ago, Canada’s main dairy-producing provinces introduced stricter rules to reduce the amount of skim milk—which is often wasted because there’s too much of it and not enough demand. They wanted more butterfat, which is used in products like butter and cream and is in higher demand.
To meet these new rules, farmers found ways to increase the butterfat content in their milk—like feeding cows palm oil supplements (which led to complaints about “hard butter” at the time). This worked: now milk in Ontario has more butterfat than ever—about 4.5% compared to 3.8–4% before.
But this created a new problem: farmers use up their quotas faster because their quota is based on butterfat, not milk volume. So if butterfat is higher, they can ship fewer litres of milk before hitting their limit. To fix this, the industry gave farmers quota increases and extra production days.
Now milk plants (processors) are getting less milk by volume—even if it’s richer in fat. For example, a truck that used to carry 32,000 litres of 4% milk might now carry less milk with 4.5% fat. That’s causing supply issues for processors who still need a certain amount of milk to make products.
Meanwhile, there’s now a surplus of butter and cheese, because the milk coming in is so fatty. They already have as much butter and cheese in storage in January as they’d normally expect to have by summer—when milk production is higher and demand is lower. They’re running out of storage space.
And they can’t just cut milk production, because processors still need it. So they’re stuck in a catch-22.
On top of it all, the high-fat milk is very expensive. In Ontario, raw milk now costs over $102 per 100 litres—while it’s only about $66 in the U.S. That makes Canadian milk production very profitable, if you’re part of the supply-managed system (aka “the club”)."
In short:
➡️Tried to fix a problem (dumping skim milk)
➡️ Created new problems (less volume, storage issues, higher prices)
➡️Industrial milk in Canada is twice as expensive as in the U.S.
➡️Now they’re stuck between needing more milk and having too much fat.
FYI. All this information is public.
"Sylvain, thank you for calling out a misleading idea that Canadian dairy farmers are losing money. In fact, the dairy industry has made some decisions that are now backfiring.
A few years ago, Canada’s main dairy-producing provinces introduced stricter rules to reduce the amount of skim milk—which is often wasted because there’s too much of it and not enough demand. They wanted more butterfat, which is used in products like butter and cream and is in higher demand.
To meet these new rules, farmers found ways to increase the butterfat content in their milk—like feeding cows palm oil supplements (which led to complaints about “hard butter” at the time). This worked: now milk in Ontario has more butterfat than ever—about 4.5% compared to 3.8–4% before.
But this created a new problem: farmers use up their quotas faster because their quota is based on butterfat, not milk volume. So if butterfat is higher, they can ship fewer litres of milk before hitting their limit. To fix this, the industry gave farmers quota increases and extra production days.
Now milk plants (processors) are getting less milk by volume—even if it’s richer in fat. For example, a truck that used to carry 32,000 litres of 4% milk might now carry less milk with 4.5% fat. That’s causing supply issues for processors who still need a certain amount of milk to make products.
Meanwhile, there’s now a surplus of butter and cheese, because the milk coming in is so fatty. They already have as much butter and cheese in storage in January as they’d normally expect to have by summer—when milk production is higher and demand is lower. They’re running out of storage space.
And they can’t just cut milk production, because processors still need it. So they’re stuck in a catch-22.
On top of it all, the high-fat milk is very expensive. In Ontario, raw milk now costs over $102 per 100 litres—while it’s only about $66 in the U.S. That makes Canadian milk production very profitable, if you’re part of the supply-managed system (aka “the club”)."
In short:
➡️Tried to fix a problem (dumping skim milk)
➡️ Created new problems (less volume, storage issues, higher prices)
➡️Industrial milk in Canada is twice as expensive as in the U.S.
➡️Now they’re stuck between needing more milk and having too much fat.
FYI. All this information is public.
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