The eastern Canadian provinces have approved a five per cent dairy quota increase — their largest one-time quota increase since the daily quota system was implemented in 1998.
It will also be implemented quickly, on July 1.
The five provinces — Prince Edward Island, New Brunswick, Nova Scotia, Quebec and Ontario — create quota policy collectively, referred to as P5.
According to Kristin Benke, economist with Dairy Farmers of Ontario, between August 2016 and July 2017, there has been an increase of 12 per cent in quota issued by the P5, including one per cent in August, one per cent in September, three per cent in November, two per cent in December and now five per cent in July.
According to a statement from Dairy Farmers of Ontario and the P5, the increase is needed as there still isn’t enough milk produced to fill the market for butter.
“This decision is intended to ensure P5 milk production continues to fill all current demand, as butter stocks have not surpassed their updated target level of 35,000 tonnes.
“Demand for dairy products continues to be strong while P5 processing capacity has increased since the beginning of April but continues to be closely monitored.”
As butter demand has increased, there’s been an increasing amount of skim milk left, after the butter fat has been removed to make butter and other products.
Without adequate processing for that skim milk, it has become a waste product, sold to feed markets or disposed of.
Increasing investment in processing should take care of some of that excess skim milk powder with the creation of protein isolates.
A new class of milk in Ontario was implemented last spring, called Class 6. It lowered the price of milk to be used to make milk protein isolates in order to compete with imported American milk protein isolate products.
The rest of the country has since followed suit in creating similar pricing, called Class 7, but it is still under discussion.
— John Greig is a field editor for Glacier FarmMedia based at Ailsa Craig, Ont. Follow him at @jgreig on Twitter.