Quarterly Canadian Milk Production Update – Sep ’19
Executive Summary Canadian milk production figures provided by Statistics Canada were recently updated with values spanning through the end of the ’18-’19 production season. Highlights from the updated report include:
- Canadian milk sold off farms has slowed of late, declining on a YOY basis over ten consecutive months through Jul ’19. ’18-’19 annual Canadian milk sold off farms declined 0.5% YOY from the record high levels experienced throughout the previous production season but remained at the second highest annual level on record.
- The Canadian milk cow herd has plateaued over the last several years following significant declines experienced since the beginning of the Canadian dairy supply management system. Statistics Canada shows the Canadian milk cow herd declining slightly on a YOY basis as of Jul 1st, 2019, but remaining 1.3% above three year average figures.
- The Canadian milk cow herd and milk production volumes have expanded since the Mar ’17 creation of Class 7 milk, which has been used to price powder at the lowest of prices observed throughout major dairy exporting regions, effectively guaranteeing that Canadian product will always be competitive globally. Canadian powder export volumes have increased significantly since Class 7 milk has been put in place, however the Canadian government recently agreed to eliminate the Class 7 milk class as part of the United States-Mexico-Canada Agreement (USMCA). Under the USMCA, the Canadian Class 7 milk class must be eliminated six months after the agreement is signed into order.