Dairy farmers in the Saskatoon region are trimming production in response to uncertain market conditions brought on by the COVID-19 crisis.
“The pandemic has affected all types of businesses, including dairy farms, not just in Canada, but around the world,” said Sask Milk Manager of Policy and Communications Joy Smith in an interview April 15. “We’ve seen a major shift in the market as restaurants and food services closed, because that effectively reduced demand for dairy products.
“There’s also been incredible fluctuation in consumer purchasing at the retail level, so it’s a very unpredictable situation.”
Smith said the abrupt closure of restaurants, coffee shops and food service outlets resulted in a sudden sharp decline in demand for milk products.
“It created a short-term situation where there was nowhere for that product to go; and because it’s perishable; that led to some disposal last week.”
Smith said the situation was extremely rare.
“The only other time producers had to dispose of milk was over a decade ago when there was a massive ice storm and some trucks couldn’t physically make it out to the farms to pick up the milk.”
Smith said producers are working with milk processors and the Canadian Dairy Commission to “figure out what the new normal is” and ensure that the industry is able to rebound once the COVID-19 crisis is over.
“We don’t want drastic cuts to production, because then it becomes very difficult to respond when demand picks up again,” said Smith. “We don’t want to over-react, or under-react. We still need to have the milk there when it’s needed, and we’re trying to do our best to adjust to constantly-changing conditions.”
SaskMilk Vice-Chair Albert Leyenhorst of Dalmeny said farmers have three options when it comes to reducing production: culling the herd, drying some cows up early, and shortening the cows’ feed rations.
“Dairy cows don’t have a switch that you can simply turn on and off,” said Leyenhorst in an interview April 15. “You want to be able to reduce your production, but still be in a position to expand when the market turns around.”
Leyenhorst said dairy cows reach their peak production about a month after calving. Over the course of 12 or 13 months, the cows normally have a two-month period where they are “dry” and don’t produce milk.
“If you dry a few up early, that will affect the tail end of your production,” said Leyenhorst. “You can cut back your production by taking out those cows that are at the tail end of their lactation period. That doesn’t negatively affect the cows because they’re almost dry.”
SaskMilk Director Anthony Nienhuis, who farms near Martensville, said in addition to drying up some cows, he has also culled as many animals from his herd as he is able, and also adjusted their feed to reduce the amount of milk they produce.
“Dairy cows are genetically wired to produce milk,” said Nienhuis. “It takes a fair bit to back them off, and we don’t want to harm the cow over the long term.
“It’s also important that you don’t shrink your herd too much because it’s not easy to get back to full production when the market changes.
“We can add milk to the system, but it will probably take several months for farmers to adjust back, because the animals have to calve. There’s a natural cycle that has to be taken into account.”
Nienhuis said despite the current drop in demand, the market is still there.
“This is a pretty unstable situation,” said Nienhuis. “And we don’t know what the long-term effects are. People’s buying habits may change, and if they do, we’ll have to adjust accordingly.”
SaskMilk issued a statement on April 2 in response to the COVID-19 situation, saying that while processors and retailers are adjusting to market fluctuations, any shortages on store shelves are not due to lack of production capacity at the farm level. Rather, they reflect “real-time adjustments” in processing of the milk.
“A dairy farm cannot decrease the amount of milk it produces overnight,” stated the SaskMilk notice. “A cow produces a certain amount of milk per day and farmers must continue to milk them to keep them comfortable and well.”
SaskMilk said the industry is utilizing as much milk as possible, including donating to food banks and those who need it most.
Smith said the dairy supply-management system in Canada means all farmers share equally in the financial pinch resulting from a temporarily smaller market.
“Individual farmers aren’t being asked to absorb the whole impact by themselves,” said Smith. “It’s pooled among dairy farmers across western Canada, so it is not disproportionately affecting a few individual producers, even though it’s affecting the income of all producers.
“In other parts of the world, individual farmers are bearing the brunt of the crisis on their own.”
“We don’t know how long this will last,” said Leyenhorst.
“Everyone is in the same boat, but the big positive is that the cost is spread out among all producers so no one producer is going to suffer unduly.”
The Saskatoon region is the largest source of milk production in the province, and a major contributor to the economy of the area.
“Corman Park has a lot of dairy operations,” said Leyenhorst. “It employs a lot of people.”
He said dairy farms are taking precautions to ensure workers and animals are safe.
“We want to keep the workplace safe,” said Leyenhorst. “We do our best to keep everything clean and disinfected.”
SaskMilk was established in 2010 as a producer marketing board under The Agri-Food Act, 2004.
SaskMilk’s general role and responsibility is to design and implement dairy policies and programs for the benefit of producers and other industry stakeholders.
The SaskMilk Board of Directors is comprised of nine active dairy producers and elected by the province’s licensed dairy producers.
The Board is charged with a number of responsibilities including the purchase of producer milk, the transportation of milk to licensed processors, compensating licensed producers through a multiple-component pricing system, enforcement of facility and quality standards, and managing production levels in conjunction with national and regional marketing agreements.