It's Your Turn
June 24, 2002
WTO Panel Cases to which Canada is a Party
Canada - New Zealand/US - Measures Affecting the Importation of Milk and the Exportation of Dairy Products
All About Canada's Dairy Industry
Canada's dairy sector is a significant part of the Canadian agriculture and agri-food economy.
In 2000, total net farm cash receipts from the dairy sector stood at $4.1 billion. This puts the industry in third place in the Canadian agriculture sector behind grains and red meats.
During the same period, dairy products shipped from approximately 281 processing plants were valued at $9.8 billion, accounting for 14.3% of all processing sales in the food and beverage industry in Canada. Moreover, there are nearly 26,000 people working on dairy farms, and almost 20,500 other workers are employed at the primary processing level.
About 81% of Canada's dairy farms are in Ontario and Quebec, 14% in the Western provinces, and 5% in the Atlantic provinces.
For the dairy year 2000-2001, there were 1.16 million cows in Canada on 19,363 dairy farms, delivering 75.1 million hectolitres of milk. The average Canadian dairy farm had 59 cows and produced 3,878 hectolitres of milk.
Canada supplies more than 20% of dairy genetics to the world in the form of high-quality dairy cattle, embryos and semen. However, Canada exports less than 1% of the volume of dairy products traded on international markets.
Canadian milk and dairy products are recognized internationally for their superior quality. Canadian dairy product exports totalled more than $425 million in 2001. Canada exports easily stored products like butter, milk powders, condensed and evaporated milk to developing countries. As well, higher-value dairy products such as aged cheddar cheese, some of the finest speciality cheeses, ice cream and dairy beverages have been exported to traditional and new markets.
Dairy product imports into Canada totalled $545 million in 2001. Cheeses had the majority with 36% of import value. The European Union is Canada's main supplier of imported dairy products, accounting for 35% of total dairy product imports. Cheese is the main dairy product imported from European Union countries. New Zealand is Canada's second leading supplier with 27%, followed by the United States with 23%.
In 2001, Canadian dairy genetics, recognized for their disease-free status and their ability to produce high quantities of milk over many lactations were exported to 50 countries. Exports of Canadian dairy genetic material are valued at more than $150 million annually. Major export markets were Australia, Brazil, Germany, Iran, Japan, Mexico, the Netherlands, Spain, the United Kingdom and the United States.
Canada's dairy sector functions under a supply management policy framework. The federal and provincial governments authorize provincial milk marketing boards and agencies to use individual producer quotas to match overall milk production to domestic market requirements of milk and dairy products.
Getting milk from the cow to the consumer requires a high degree of coordination and cooperation among producers, processors, provincial and federal governments, and inspection staff. The Canadian Dairy Commission (CDC), a Crown corporation, and Agriculture and Agri-Food Canada-in partnership with producer associations, such as the Dairy Farmers of Canada, and dairy processors' organizations, such as provincial dairy councils-play a key role in helping to ensure that the Canadian dairy industry remains strong and dynamic.
There are two markets for domestic milk in Canada. In 2001, the fluid market (table milk and fresh cream) accounted for 38.6% of milk production or 28.1 million hectolitres, and the industrial market (manufactured dairy products such as butter, cheese, yogurt and ice cream) accounted for the remaining 61.4% or 44.7 million hectolitres of milk.
The industry has excellent research and development capabilities, both at the production and processing levels. The Canadian dairy sector has impressive research facilities (government, universities, private sector) that work to maintain and improve the long-term competitiveness of the sector through the development and transfer of innovative technologies.
Strict quality standards at both the farm and processing levels contribute to Canada's strong reputation for high-quality dairy products. The Canadian dairy industry is also active in technological development and in the use of modern technologies.
The responsibilities of the Minister of Agriculture and Agri-Food include supporting agricultural productivity and trade, stabilizing farm incomes, encouraging research and development, and being responsible for the inspection and regulation of animals and plant-life forms. The Minister has been assigned responsibility for coordinating rural development and enhancing the quality of rural life. Agriculture and Agri-Food Canada's mandate includes dairy policy and research, market development, rural development, and livestock improvement.
Updated on June 26, 2002
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