The economics of dairy farming in Canada

Government policies affecting the Canadian dairy industry represent a unique solution to a problem of surpluses which exists in most Western countries. This paper sketches an outline of dairy farming today before examining the trends and structural changes undergone by the industry over the Seventies. Milk yields have increased slightly and total numbers of dairy farmers have halved. After a decade of turmoil in international markets for dairy products, some stability is now returning and dairy farmers appear to be on the verge of a technological leap forward in dairying. By the end of the Eighties there could be no more than 13,500 commercial dairy farms supplying milk in Canada.Canada, along with other Western countries, produces more milk protein than it needs and different proposals for redressing this imbalance in the Eighties are appraised. One proposal advocates cutting back on domestic production and purchasing butter to make up the difference on the international market. A scheme based on recent British analysis proposes a swing towards Jersey milk production. Lastly the possibility of expanding market demand for products rich in milk protein is examined.