The Industry > Production
As a key contributor to the Canadian economy in the 2005 calendar year, dairy production ranked fourth behind grains, red meats and horticulture, generating $4.84 billion in total farm cash receipts.
Cash receipts from milk and cream sold off farms
Canadian dairy producers supply two main markets:
In 2005, the fluid market accounted for approximately 38 percent of total producer shipments of milk, or 28.3 million hectolitres at 3.6 kilograms of butterfat per hectolitre. The industrial market accounted for the remaining 62 percent or 46.5 million hectolitres of total producer shipments.
The number of dairy farms has fallen significantly over the past ten years. During the same period, the national dairy herd has declined by 19 %, while total milk production increased slightly. In 1995, total Canadian production was 71.97 million hectolitres while in 2005, it reached 74.92 million hectolitres. These adjustments reflect ongoing restructuring at the farm level. There are fewer farms but more cows on each farm. Since the 1995, the number of cows per farm has risen by about 16% and the average Canadian dairy farm now has 66 cows. Better feeding, disease control and genetic advancements have increased the amount of milk produced per cow.
In 2005, there were approximately 16,224 dairy farms in Canada which produced a total of 74.92 million hectolitres of milk. The industry has experienced a 37 per cent decline in the number of dairy farms over the past decade, from 26,199 in 1994 to 16,224 in 2005. However, individual farming units have grown in size and have become more effective in operation. The average production per farm has increased significantly, by 68%, since 1995.
The overall number of cows has also decreased over the past 10 years, however the production per cow has increased by 14%. In 1995, there were 1.274 million dairy cows in Canada producing an average of 8,251 kilograms of milk per cow. In 2005, there were approximately 1.06 million dairy cows in Canada, producing an average of 9,422 kilograms of milk per cow.
The typical Canadian dairy farm is quite specialized, with most of its revenue coming from milk production and the sale of dairy cattle. It is a family-owned operation with a herd of about 66 cows. The farm owners are in their mid-forties and have built up considerable equity in their operation.
The rustic image of a typical dairy farm isolated from the technological progress that affects urban lives is outdated. The typical farm family is accustomed to using advanced technology in such practices as artificial insemination, breed selection and labour-saving milking systems. Hardier crops, feed supplements and improved livestock are a few of the benefits research has provided. Computerization of feeding and herd management systems, and equipment innovations are also rapidly changing the way things are done on the farm.
Milk producers constantly strive to improve their efficiency in order to maintain the viability of their enterprise. It is critical to develop expertise in a number of areas which have an impact on the performance of their operation, including:
In addition, today's dairy farm represents a considerable capital investment in land, buildings, machinery, equipment and livestock. Like other successful business executives, milk producers must be skilled in budgeting, cash flow analysis and debt management. They must constantly be aware of costs and events that may affect their returns.
Top of page Printer FriendlyLast Updated: 2006-11-23
