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As Vermont's Milk Industry Continues To Free-Fall, Canadian Dairies Are Thriving

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HDRider

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Hans Kaiser says when he came to Canada in 1975, he was able to establish a farm with his family.

"We always had this quota system," he says. "I believe we have the best system in the world. I have no doubt about this."

The quotas in Canada can be bought and sold; they're quite valuable, several million dollars or more for an average farm. The price that farmers are paid is also controlled: It's established based on the cost of producing milk on what's deemed to be an economically efficient farm.

The system is not financed by the government, although it has led to higher retail prices for milk than in the U.S.


The Vermont Agency of Agriculture says 12 farms have gone out of businesses this year, bringing the number of working dairy farms down to around 750, compared to about 1,100 a decade ago. "Gone! No cows here," he says. "We've got another one on the corner here, beautiful farm, nice little family farm. No cows. It's sad to see it happen." Says Jacques Rainville's place in Highgate Center, VT.

Many farmers in Vermont say they're getting paid less than what it costs to produce the milk.

https://www.npr.org/sections/thesalt/20 ... ium=social
 
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HDRider

HDRider

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sim.-ang.king":pfuxs5xn said:
Yay, let the government throw money at it, that'll fix er.
From the article, "The system is not financed by the government"
 

Bigfoot

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Yes, the not financed by the government part got my attention.
 

Douglas

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the gov. is not paying the subsidy but the consumers are by gov. restrictied supply (same thing), just like to old US tobacco program. Bet they have a well financed lobby/political action committee. That way the consumer can pay for politicians to get reelected and continue the cycle of "supply management"
 

Aaron

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The big difference is unless you started in the late 70's, when the quota system started, you could never afford to get into dairy here.

The biggest mistake ever made was putting a dollar value to the quota itself. When it started, when we started milking, it had zero value. When we quit, it was worth thousands. Now it's worth tens of thousands which quickly becomes millions for many operations.

A 50 cow dairy in this country will cost you a million just in quota.
 

cbcr

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This is a problem, not just in Vermont. Dean Foods sent out letters to about 119 dairies that they would no longer be able to take their milk starting June 1. These dairies are in PA, KY, TN, OH, and IN. Heard that another Coop in the east sent out letters to many of their dairies that they are cutting them loose.

Part of this is that Walmart is opening up their own processing plants. Rather than buy milk from local small farms, they are opting to buy from farms that can ship a tanker load. This is forcing out the family farm.

Many producers right now are receiving less for their milk than it costs to produce it.

Producers are in a quandary as what to do. Many farms have been in dairy production for several generations and the ones currently operating the farm are feeling like a failure. Many Coop's have sent out letters to its producers with hotline numbers. Right now farm related suicides are staggering. Many are saying that farm suicides rates are higher than military veteran suicides.

While many are struggling they feel that they can't sell out because the value they may receive for their animals will be far less that what they need to pay their debt.

The dairy industry has a milk checkoff that producers have to pay in to, state and federal. Many producers would like to know where these dollars are being spent to promote milk and milk products. The fake products, Almond, Soy, Coconut and others are advertising like crazy and taking a bigger chunk of the real dairy products market. Some saving grace is that butter and cheese consumption is up. And McDonald's is one fast food chain that is using butter it its products and also serving it.

The milk prices paid to producers has been steadily dropping since about 2006. Many farm products tend to go in cycles where it is up and then goes down and starts over again, but dairy producers have not seen the cycle come back up and the foreseeable future for dairy prices do not show any improvement.

The dairy industry today continually produces more milk and doing it with fewer cows.

We don't see ads on TV or other forms like their was a few years ago.
 

Stocker Steve

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Local paper announced that a mega dairy is building another 9,500 Jersey cow unit SW of us. Meanwhile family diaries are having difficulty finding an auctioneer to sell off their cows. The USDA milk "assistance" program is a band aid on cancer. And, the US milk production is continuing to increase...

The mega dairy is an industrial model. Their have their own construction company. They build dorms for Mexican workers on site. They contract to buy in feed. They have their own vet. They understand return on equity.

So what can the beef industry learn from this?
 
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Aaron":1f7myta9 said:
The big difference is unless you started in the late 70's, when the quota system started, you could never afford to get into dairy here.

The biggest mistake ever made was putting a dollar value to the quota itself. When it started, when we started milking, it had zero value. When we quit, it was worth thousands. Now it's worth tens of thousands which quickly becomes millions for many operations.

A 50 cow dairy in this country will cost you a million just in quota.
They mentioned that in the article and said banks were happy to lend using the quota as collateral.
 
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HDRider

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Stocker Steve":34o34so8 said:
Local paper announced that a mega dairy is building another 9,500 Jersey cow unit SW of us. Meanwhile family diaries are having difficulty finding an auctioneer to sell off their cows. The USDA milk "assistance" program is a band aid on cancer. And, the US milk production is continuing to increase...

The mega dairy is an industrial model. Their have their own construction company. They build dorms for Mexican workers on site. They contract to buy in feed. They have their own vet. They understand return on equity.

So what can the beef industry learn from this?
It has happened with pork and poultry.

Mega is MAGA?
 

Logar

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In Canada - the chickens and the dairy are protected by a very socialist system in a very socialist country. They do not truly need to know how to complete because they are guaranteed to make a profit and sell their quota for millions when they retire.

Beef and pigs are pretty much on their own.

All other remaining agriculture operations essentially scramble for the crumbs.

Socialism in Canada is on the increase - especially in the cities - but not much goes to their farmers.

As with most lefty countries, food is only important when you are hungry.Otherwise the "government will provide."

Best to all.
 

Stocker Steve

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Mega is very large.
They build factories, often called units, of about 10,000 cows each, in areas where permitting and corn silage are easier.
They have a recipe, and they use it to operate multiple factories efficiently.

I think the Kiwis were doing something similar with grazing dairies on "cheap" land in in the mid south, till they found out that summer grass growth was not as consistent as in New Zealand... Last I heard they were trying to adapt their rye grass based recipe.
 

Aaron

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HDRider":1hc9pvhm said:
Aaron":1hc9pvhm said:
The big difference is unless you started in the late 70's, when the quota system started, you could never afford to get into dairy here.

The biggest mistake ever made was putting a dollar value to the quota itself. When it started, when we started milking, it had zero value. When we quit, it was worth thousands. Now it's worth tens of thousands which quickly becomes millions for many operations.

A 50 cow dairy in this country will cost you a million just in quota.
They mentioned that in the article and said banks were happy to lend using the quota as collateral.

Oh they are. But it is a completely screwed up system. Everyone ignores the fact that it's value (quota) is based on regulation of production. If government decides it no longer makes sense to have production limits regulated, than it no longer has value. But it is still debt according to the bank, so who do you think is left holding the reigns? Taxpayers. Because dairymen will demand to be covered from the loss, even though it is them that decided it had value in the first place.
 

Stocker Steve

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Aaron":2xly2uce said:
HDRider":2xly2uce said:
They mentioned that in the article and said banks were happy to lend using the quota as collateral.

Oh they are. But it is a completely screwed up system. Everyone ignores the fact that it's value (quota) is based on regulation of production. If government decides it no longer makes sense to have production limits regulated, than it no longer has value. But it is still debt according to the bank, so who do you think is left holding the reigns? Taxpayers. Because dairymen will demand to be covered from the loss, even though it is them that decided it had value in the first place.

For large existing players - - a main benefit from regulation is to reduce start ups and thus reduce competition.
Usually it is under the guise of licensing and reporting and inspections. Here we also have a production quota.

What happened in Euro zone when they went away from dairy quotas?
I think their plan was to export, because they did this a couple years ago when milk prices were high.
 

Aaron

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Stocker Steve":1eyitqfz said:
Aaron":1eyitqfz said:
HDRider":1eyitqfz said:
They mentioned that in the article and said banks were happy to lend using the quota as collateral.

Oh they are. But it is a completely screwed up system. Everyone ignores the fact that it's value (quota) is based on regulation of production. If government decides it no longer makes sense to have production limits regulated, than it no longer has value. But it is still debt according to the bank, so who do you think is left holding the reigns? Taxpayers. Because dairymen will demand to be covered from the loss, even though it is them that decided it had value in the first place.

For large existing players - - a main benefit form regulation is to reduce start ups and thus reduce competition.
Usually it is under the guise of reporting and inspections. Here we also have a quota.
What happened in Euro zone when they went away from dairy quotas?

There is reporting and regular inspections here. Neighbors were filthy lazy dairy farmers and got 3 strikes from the inspector. 3rd strike he said, your done - sell the cows and the quota, you'll never ship milk in this country again.
 

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Logar":yvfiktob said:
In Canada - the chickens and the dairy are protected by a very socialist system in a very socialist country. They do not truly need to know how to complete because they are guaranteed to make a profit and sell their quota for millions when they retire.

Beef and pigs are pretty much on their own.

All other remaining agriculture operations essentially scramble for the crumbs.

Socialism in Canada is on the increase - especially in the cities - but not much goes to their farmers.

As with most lefty countries, food is only important when you are hungry.Otherwise the "government will provide."

Best to all.

Well now we all know how little you know. Thanks.
 

Aaron

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Silver":19jxg0o7 said:
Logar":19jxg0o7 said:
In Canada - the chickens and the dairy are protected by a very socialist system in a very socialist country. They do not truly need to know how to complete because they are guaranteed to make a profit and sell their quota for millions when they retire.

Beef and pigs are pretty much on their own.

All other remaining agriculture operations essentially scramble for the crumbs.

Socialism in Canada is on the increase - especially in the cities - but not much goes to their farmers.

As with most lefty countries, food is only important when you are hungry.Otherwise the "government will provide."

Best to all.

Well now we all know how little you know. Thanks.

I thought he pretty well nailed it.
 

Stocker Steve

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Logar":256jwmrl said:
In Canada - the chickens and the dairy are protected by a very socialist system in a very socialist country. They do not truly need to know how to complete because they are guaranteed to make a profit and sell their quota for millions when they retire.

Why a white meat, but not a red meat, quota? Sound like discrimination.
 

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