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 one per cent. 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 commissioners, is to stimulate domestic demand for milk per capita, which has been decreasing for decades in Canada.
As surprising as this decision may be, such a move from the commission is evidence that the dairy sector is fully aware of systemic pressures on supply management.
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