Milk and Cookies

Canada’s dairy industry makes milk products for us!

Canada’s dairy industry ensures a safe, affordable, abundant supply of milk products for Canadians

Canada’s dairy industry is often a sticking point when it comes to negotiating trade deals with the U.S. But why? The answer lies with how the two countries produce and sell their milk. In Canada, we have a supply management system that was created in the 1960s to protect dairy farmers and consumers from the sheer size of the U.S. dairy industry. Each provincial milk marketing board sets a quota for how much milk the dairy farms in their jurisdiction should produce. The provincial boards also set the price for milk. The federal government protects dairy farmers by setting tariffs on dairy imports that exceed Canada’s dairy limits. While it’s true that these tariffs can be as high as 200-300% (!!), the U.S. has never reached this import limit and therefore has never paid a tariff on dairy products. Canada’s supply management system for dairy (and also eggs and poultry) ensures that prices are stable and production is predictable and manageable. Canadian farmers are free to export to other countries, but farmers here are constrained by the quotas given to producers. They simply don’t have excess milk to export. In contrast, the U.S. works on a market-driven system where farmers compete with each other and global dairy importers for a share of the U.S. market. While there is minimal government involvement in the U.S. dairy industry compared to Canada, the U.S. government does offer farm subsidies in the form of direct payments or loans to farmers. Economists estimate that up to 45% of the cost of milk production is paid for by the U.S. government (source). Canada and the U.S. also have different standards for the quality of the milk each country sells. Canada does not allow the use of artificial growth hormones (rBST) and antibiotics, while the U.S. does. Canada also has more stringent standards for bacterial counts in the milk it sells than the U.S. Now that you know what’s driving the pricing and supply of Canada’s dairy industry, why not enjoy a quintessentially Canadian dish such as cod au gratin? You can find the recipe, which features a creamy béchamel sauce and the cheesy goodness of Gruyere and cheddar cheeses, in my cookbook “Like Magic!”