Revisiting the need to protect Canada’s dairy supply management system

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A lifetime ago, I wrote about the need to continue protecting the Canadian dairy supply management system. In the years since then, both the political landscape and I have undergone a spate of changes and shifts to our fundamental understanding of how the world works. 

What was once thought true turned out to be false, the impossible became possible, and the unconventional and abnormal are now the opposite. As a consequence, I feel it’s necessary to look back and re-examine my original argument, to see what I believe still stands up to scrutiny and what has changed in the time being.

First and foremost, there is still a need to protect the dairy industry from the outside — for example, the U.S. market. While trade relations between the countries are currently in a state of flux, now is the perfect time for a two-fold approach to international trade — building and strengthening relations elsewhere and reconsidering which domestic markets should be protected. 

Opening the dairy market would cut the prices of milk, eggs, meat, and certain produce. However, that would be due to the U.S.-imported products flooding the Canadian market. In a worst-case scenario, the sheer numbers would cause domestic agri-food producers to either go bankrupt trying to keep pace or shut down because of a lack of means. 

All of that being said, it must also be considered that dairy farming is not the idyllic image most people have in their heads — old men in red barns hand-milking cows on quaint homesteads. That mode of production cannot sustain a sector which generated 95.90 million hectolitres in milk and $8.56 billion in 2023. 

Canadian dairy and dairy farmers, by extension, with their operating income of $70,000 to $80,000, are highly mechanized and organized to produce output for Canadian and foreign markets. In 2018, Maclean’s reported that the average dairy producer’s net worth is nearly $5 million. The average net income of dairy farms in 2022 was $246,264, according to Statista. 

This establishes an aspect of the supply and management system that I had foolishly not considered back then. Canadian dairy farmers, and most farmers for that matter, are very much well off and far from destitute. Perhaps they are not on the other extreme of popular imagination, as jet-setting mega-wealthy elites, and operation costs might eat up most of that money, but they certainly are not wanting for anything nor are they relying on sustenance farming to stay fed.

My verdict on the dairy supply management system, to put it simply, is less definitive than it once was. I am the last person to ever suggest free-market solutions to anything. While opening the dairy sector to outside forces would inevitably lead to the gain of international capitalist classes, Canadian dairy farms are a clique unto themselves — one that would sooner dump millions of litres than let their profits or market hold slip away. 

Ideally, either the Canadian Dairy Commission or the federal and provincial governments should be strengthening oversight and regulations to ensure a flexible dairy industry that is responsive to consumers whilst maintaining its integrity. 

Right now, the latter is being done more than the former. The industry is being sheltered from both the U.S. and accountability.