Dark days are ahead for supply management in Canada.
For the first time in 22 years, the Canadian Dairy Commission has decided to reduce the price of milk at farmgate by 1 percent. The price reductions will commence in February.
Under its supply management regime, established in 1966, the commission’s mandate has been to set the price of milk per hectolitre for dairy farmers owning production quotas. The new decision to reduce prices, according to the commission, is to stimulate domestic demand for milk per capita which has been decreasing for decades in Canada.
In April, Europe ends its quota system, and many producers have started to flood the market with much more milk.