Dairy farming in Canada

Dairy farming is one of the largest agricultural sectors in Canada. Dairy has a significant presence in all of the provinces and is one of the top two agricultural commodities in seven out of ten provinces.^[1]

In 2018, there were 967,700 dairy cows on 10,679 farms across the country.^[2] Quebec and Ontario are the major dairy producing provinces, with 5,120 and 3,534 farms, which produce 37% and 33% of Canada's total milk.^[3] This is supposed to represent 8% of farmers in Canada.^[4] While dairy farming is still prominent in Canadian society, the number of dairy farms in Canada has been dropping significantly since 1971 while the size of the average farm has significantly increased to 89 cows per farm.^[5]

The Canadian dairy sector contributes approximately $19.9 billion yearly to Canada's GDP, and sustains approximately 221,000 full-time equivalent jobs and generates $3.8 billion in tax revenues.^[6] On average, two-thirds of Canadian dairy produced is sold as fluid milk while the remaining one-third is refined into other dairy products such as milk, cheese and butter.^[7]

In Canada, dairy farming is subject to the system of supply management. Under supply management, which also includes the egg and poultry sectors, farmers manage their production so that it coincides with forecasts of demand for their products over a predetermined period – while taking into account certain imports that enter Canada, as well as some production which is shipped to export markets. Imports of dairy, eggs, and poultry are controlled using tariff rate quotas, or TRQs. These allow a predetermined quantity to be imported at preferential tariff rates (generally duty free), while maintaining control over how much is imported. The over-quota tariffs are set at levels where practically no dairy products are sold to Canada above the quotas. That should allow Canadian farmers to receive a price reflecting the cost to produce in the country.^[8]

There has been pushback regarding the supply management system, and research indicates that the Canadian population generally have varied views with the current system.^[9][10] The Dairy Farmers of Canada, a dairy advocacy group, claims that the system is necessary for farmers to provide quality milk to consumers.^[11]