Dairy regulators dumping milk amid supply glut

OTTAWA—The Canadian dairy industry is dealing with excess supply of milk by dumping it in sewers, on farms, or turning it into low-cost pig feed, the Globe and Mail reports.

According to a letter sent to farmers obtained by the Globe, Dairy Farmers of Ontario chairman Ralph Dietrich acknowledged the agency has been forced to dispose of liquid skim milk and expects the problem to continue.

“There have been days in the last couple of weeks when we have had to dispose of skim milk in lagoons,” the letter stated. “Right now, we continue to be challenged on a daily basis and there is no obvious end in sight.”

Ontario farmers have produced 5.4 million litres of excess milk over the past several months, the Globe reports, 800,000 litres of which has been dumped into farm manure pits known as lagoons.

The reports again call into question the viability of Ontario, and Canada’s supply-managed industries. A report released by the Montreal Economic Institute earlier this week said supply management is hurting business and consumers, and as the price of a basket of goods rises, now would be a good time to put an end to the regulation imposed on the dairy, poultry and egg industries.

“Supply management disproportionately hurts the poorest Canadians,” Mario Dumais, associate researcher at the MEI and former economist for the Union des producteurs agricoles said. “This system imposes an additional cost of $339 a year on the poorest households. As a proportion of income, this represents a negative impact that is five times greater than for rich households. This policy is therefore heavily regressive.”

According to reports, the current supply glut is a result of high demand for butter and cream. The process to obtain either leaves liquid skim milk that would normally be sold to consumers or manufacturers. Growth in imports of concentrated milk protein, however, has reduced demand for skim milk and left the industry with few options.