Organic milk shortage has processor looking to import -
Ontario is facing a supply issue because Quebec is concentrating on filling its own market first

By Frances Anderson, Ontario Farmer staff
Ontario Farmer © Copyright 2006, Sun Media Corporation
Tuesday, March 28, 2006

Organic milk is in such short supply at least one processor is looking to import it, producers here were told last week.

The Canadian Dairy Commission had not received an official request for a supplementary import permit for organic milk, as of March 23, but a spokesperson said, "We heard that one company has informed International Trade Canada that it might ask for one."

The shortage became critical in Ontario earlier this month as Quebec stopped shipping surplus organic milk into the province on March 3. "We have to first fulfill Quebec's market, and then if we have some volume left, we can ship it to Ontario," said Jean Vigneault, a spokesman for the federation of Quebec dairy farmers.

Ontario had been receiving about 25,000 litres of organic milk a week. DFO directors understood Quebec's actions were the result of a "tiff with a processor" and that not all the milk being kept back was going into organic products.

However, Vigneault insisted "Yes" all organic milk produced in Quebec is going into organic products. And, he added, Ontario will get 25,000 litres of organic milk this week, "because the processor in Quebec doesn't require all the volume."

Vigneault said the challenge for Ontario is that Quebec will no longer be a regular source of supply.

"If the demand is so strong in Ontario, I expect processors will be able to pay a premium that will bring some milk," added Vigneault. In Quebec, the federation negotiates an organic premium with processors. Since Feb. 1/06 Quebec's organic dairy farmers have received $19/Hl more for class 1 and 2 milk, and $11.25/Hl more for class 3 and 4 milk. There'll be an additional $3/Hl, and $2/Hl increase come Feb. 1, 2007, bringing the returns to $22/Hl and $13.25/ Hl, respectively.

Ontario does not have a separate pool for organic milk. Producers receive premiums of about 18 per cent, as of April 1, from OntarBio Organic Farmers Co-op Inc. Since most of the processors are co-ops, producers may also receive dividend payments.

"There probably in the future, needs to be a pool for organic producers," said John Palmer, the DFO director for region eight. To encourage more production, Dairy Farmers of Ontario has granted three more production incentive days beginning in April and running until December, 2006. These are in addition to the three days in each of the six months from December, 2005 to May, announced last December.

The board expects about 60 per cent of the additional volume will be utilized, as organic producers can't ramp up production dramatically because organic dairy cattle and feed are scarce.

Transition to organic production takes at least three years, and most organic herds are smaller. However, there is at least one, and possibly two 100-cows herds ready to start organic production this fall.

There are currently 42 organic herds in the province shipping 10.7 million litres annually, and 1.3 million litres have been coming in annually, from Quebec.

OACC gratefully acknowledges Ontario Farmer for permission to post this article on our website.