Corporate Sustainability of Canadian Dairy

Dairy farming is one of the largest agricultural sectors in Canada, one of the top 2 agricultural sectors in 7/10 provinces. How it can become sustainable in coming decades is a challenge for dairy industry. Canada has 11,280 farms, average 85 cows per farm, and total production of 8.4BL (Dairy Farmers of Canada, 2018), much smaller than the U.S. farm size. Although Canada and the United State seem to have similar dairy products, the 2 countries have very different approach in sustainability resulting in different products. In dairy industry, more specifically milk, sustainability commitment is to provide consumers with affordable price, high quality products in a way that is safety for human, animal care, and that makes the people and planet environmentally, economically and socially better.

In Canada, dairy farming is subject to supply management system, which is a part of sustainability. The Canadian Dairy Commission has been in charge of 2 pillars of the supply management system: support prices and market sharing quota. Once a year, the Canadian Dairy Commission sets the support price of butter and skim milk powder following consultations with industry stakeholders. These prices are used as a reference by the provincial milk marketing boards to establish the milk price in each province. The Commission also monitors national production and demand, then recommends the necessary adjustments. What this means is that the supply of dairy products in Canada is limited to what Canadians are expected to consume in order to avoid overproduction and stable the prices. Canadian farms use quota to manage how much milk comes off their farms, resulting that fresh milk has not been shipped long distance to support the communities and economy. 99.9% of all Canadian milk is picked up from the farm every second day. Moreover, all milk truck drivers are trained experts in grading milk by sight and smell, they also inspect, measure, and take sanitary samples of milk before loading it onto the truck (Dairy Farmers of Canada, n.d.). Supply-managed producers are guaranteed a minimum price and are not subsidized through tax dollars. Contrary to Canada, the U.S. has maintained subsidies for farming (Tasker, 2018). Americans use a different system with no quota where they have bigger reliance on exporting milk. With the new United States-Canada-Mexico (USMCA) trade deal, it is more challenging for Canadian dairy industry to maintain sustainability when U.S. dairy has access to Canadian market.

With regards to milk production of Canada and the U.S., there have been differences between the neighbourhoods. Canada has stricter regulations on the use of hormones and additives. For instance, some U.S. dairy farmers use a hormone that is banned in Canada – rBST. rBST is a synthetic version of the growth hormone bovine somatotropin (BST), which cows naturally produce. It was developed by biotech giants such as Monsanto and Genentech with the commercial name Posilac to increase milk production. Posilac was approved to use in U.S. in 1993, while Health Canada did not approve it although it does not pose health risk to humans but it has negative effects on the cows, such as: mastitis, breast inflammation, infertility, lameness (CBC News, 2018). Canadian farmers must respect the laws on animal cares – abuse and negligence are not accepted in the industry. To meet the requirements of The Code of Practice for the Care and Handling of Dairy Cattle is one of the important practice to be sustainable. The Code meets or exceeds the majority of the standards of humane livestock treatment expected by the food industry and society.

Additional, another indicator, Somatic Cell Count (SCC), has been used to measure the quality of milk. SCC is composed of white blood cells that are produced by the cow’s immune system to fight an inflammation. The lower SCC, the better quality of milk. The maximum SCC of Canadian milk is lower than the American standard. According to regulation currently in force in Canada, milk cannot contain antibiotic residues and artificial growth hormones are not approved for use in dairy cattle. All milk is tested for antibiotic residues and if it is positive for antibiotic, the product is not sold to the public and the farmer will have to cover all expenses of the discarded products. In the U.S., there are also tests for antibiotics but the FDA allows for “safe levels”.

In addition to above highlights, sustainable development in Canadian dairy industry also regards to: (1) climate change through reducing greenhouse gas emissions from dairy farms; (2) efficient management of natural resources including soil, air, and water; (3) Socio-economic impact such as: minimizing carbon footprint, Lifecycle Assessment of milk production. In terms of efficient management of natural resources, Canadian dairy farmers are turning waste into energy through anaerobic digestion. The energy produced can provide enough electricity to heat and light as many as 300 households (Dairy Farmers of Canada).

To sum up, there are differences between Canadian and U.S. sustainability commitment in dairy industry since Canadian prioritizes product quality rather than lower the price, whereas U.S. would reduce the price to expand market share. Canadian milk is one of the top quality milk in the world. From a consumer’s point of view, it would be better to lean more towards healthier products.  When the USMCA comes into force, U.S. dairy products will be on shelves in Canada. Since there is no labelling requirement for dairy products made with American milk to let consumers know whether they have hormone/additive, Canadian consumers should make their choice to buy one of the highest quality milk, not only for their own sake but also for the survival of our Canadian dairy farms. To make sure the dairy products we are buying are 100% made from Canadian milk, consumers would look for the Canadian cow logo on product labels.