DFO STATISTICAL HANDBOOK

Transcription

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2 DFO STATISTICAL HANDBOOK Released December 2016

3 TABLE OF CONTENTS A. DAIRY FARMERS OF ONTARIO BOARD MEMBER REGIONS 1 B. PRODUCTION UNITS Licenced Milk Production Units in Ontario by Board Regions And Dairy Producer Committees, 2007 and Distribution of Licenced Milk Production Units by Daily Quota Levels, July 2009 and July July Table C. MILK SUPPLY Milk Marketed From Licenced Milk Production Units in Ontario, 2006/2007 and 2011/ /16, Dairy Year - August to July 4 Seasonality of Production, 2006/2007 and 2011/ /16, Average Daily Shipments as a Per Cent of Annual Average Daily Shipments, Dairy Year - August to July 5 Milk Marketed in Ontario by Board Regions and Dairy Producer Committees, 2006/2007 and 2011/ /16, Dairy Year August to July 6 Ontario Weighted Average Butterfat Tests, 2006/2007 and 2011/ /16, Dairy Year - August to July 7 Ontario Weighted Average Protein Tests, 2006/2007 and 2011/ /16, Dairy Year - August to July 8 Ontario Weighted Average Other Solids Tests, 2006/2007 and 2011/ /16, Dairy Year - August to July 9 Ontario Weighted Average Solids-Not-Fat Tests, 2006/2007 and 2011/ /16, Dairy Year - August to July 10 D. PRODUCTION BASE Canadian Requirements For Industrial Milk, Utilization of Quota By Province, 2011/ /16, Dairy Year - August to July 12 Quota Sales Over the Exchange, 2011/ /16 Dairy Year - August to July 13

4 Summary of Quota Transferred in Ontario, 2011/ /16 Dairy Year - August to July 14 Ontario Dairy Cow and Heifer Population, , July 1st 15 Estimated Milk Sold per Dairy Cow on Ontario Dairy Farms, 2011/ /16, Dairy Year - August to July 16 Dairy Cattle Breedings: EastGen, Summary of Milk Recording Programs in Ontario, Provincial Somatic Cell Counts, 2011/ /16, Average SCC 19 Per Cent of Total Producers in Six SCC Ranges, 2015/16 19 Milk Quality Program in Ontario, 2011/ /16, Dairy Year - August to July 20 E. MILK PRICES AND RETURNS Classification of Milk Sold to Ontario Processing Plants 21 Ontario Class Price Changes, February, August, Special Class Prices, 2011/ /16, Dairy Year - August to July 23 Ontario Exclusion Factor, 2006 and Class Prices at 3.6 kg of Butterfat per hl, , October 25 Class Prices at Average Composition, , October 26 Ontario Producer Gross and Net Returns for Milk Marketings Under Quota, 2006/2007 and 2011/ /16, Dairy Year - August to July 27 Industrial Support Price Structure, 2006 and DFO Producer Deductions, 2007 and Producer Transportation Charges, Ontario, 2006/07 and 2011/ /16, August to July 30 National Cost of Production Reference for February 1, Cash Receipts from Milk Sold Off Ontario Farms, 2011/ /16, Dairy Year - August to July 32

5 F. MILK UTILIZATION Provincial Utilization of Milk Sold by DFO, 2007/2008 and 2011/ /16, Dairy Year - August to July 33 Provincial Component Utilization of Milk Sold by DFO, 2015/16, Utilization, Dairy Year - August to July 34 Ontario Fluid Milk and Cream Sales: Harmonized Classification System, 2011/ /16, Dairy Year - August to July 35 Ontario Production of Specified Dairy Products, 2006/2007 and 2011/ /16, Dairy Year - August to July 36 Distribution of Ontario Dairy Processing Plants by Volume of Milk Received, Fluid and Industrial Plants, 2011/ /16 Dairy Year - August to July 37 Distribution of Ontario Dairy Processing Plants by Product Type, 2011/ /16, Number of Plants, Dairy Year - August to July 38 Composition of the Ontario Milk Transport Sector, , August 39 G. PRODUCT PROMOTION Ontario Fluid Milk Sales, 2006 and , Sales Volume Calendar Year 40 H. P5 POOL STATISTICS Quota Entitlement, P5 Pool, August 1, Utilization of Quota, P5 Pool, 2011/ /16, Dairy Year - August to July 42 Year End Calculation of SNF Above Ratio, 2011 to 2016, Dairy Year - August to July 43 P5 Weighted Average Component Tests, 2011/ /16, Dairy Year - August to July 44 P5 Daily Quota Exchange Prices, 2014/ /16, Dairy Year - August to July 45 P5 Pool Class Prices, Fluid Prices Effective February 1, P5 Target Price Changes, February, August,

6 P5 Within-Quota Prices, 2011/ /16, Dairy Year - August to July 48 P5 Volume Utilization of Milk by Class, 2011/ /16, Dairy Year - August to July 49 P5 Component Utilization by Class, 2015/16, Utilization, Dairy Year - August to July 50 P5 Fluid Promotion Budget, 2011/ /16, Dairy Year - August to July 51 P5 Transportation Cost Per Hl, 2015/16, Current Dairy Year - August to July - Weighted Average 52 P5 Transporter Cost Per Hl, 2011/ /16, Dairy Year - August to July 52 P10 Producer Share of Dairy Products Calendar Year I. FARM INPUT PRICE INDEXES (2002 = 100), EASTERN CANADA, J. CONSUMER PRICE INDEXES FOR ONTARIO (2002 = 100), K. DATES OF HISTORICAL INTEREST 56 L. METRIC CONVERSION FACTORS 57

7 DAIRY FARMERS OF ONTARIO BOARD MEMBER REGIONS Region Dairy Producer Committees 1 Glengarry, Prescott, Russell, Ottawa-Carleton (twp of Cumberland) 2 Ottawa-Carleton (except for twp of Cumberland), Dundas, Stormont 3 Frontenac, Grenville, Lanark, Leeds, Renfrew 4 Hastings, Lennox & Addington, Northumberland, Prince Edward 5 City of Kawartha Lakes, Durham Region, Peterborough, York 6 Dufferin, Peel, Simcoe, Wellington 7 Brant, Haldimand, Halton, Niagara, Norfolk, Wentworth 8 Oxford, Waterloo 9 Elgin, Essex, Kent, Lambton, Middlesex 10 Huron, Perth 11 Bruce, Grey 12 Algoma, Cochrane, East Nipissing-Parry Sound, East Sudbury-West Nipissing, Manitoulin-West Sudbury, Rainy River, Thunder Bay, Timiskaming Table 1

8 LICENCED MILK PRODUCTION UNITS IN ONTARIO BY BOARD REGIONS AND DAIRY PRODUCER COMMITTEES, 2007 AND August 1 st Glengarry Prescott Russell Board Region Carleton Dundas Stormont Board Region Frontenac Grenville Lanark Leeds Renfrew Board Region Hastings Lennox & Addington Northumberland Prince Edward Board Region City of Kawartha Lakes Durham Region Peterborough York Board Region Dufferin Peel Simcoe Wellington Board Region Brant Haldimand Halton Niagara Norfolk Wentworth Board Region Table 2

9 LICENCED MILK PRODUCTION UNITS IN ONTARIO BY BOARD REGIONS AND DAIRY PRODUCER COMMITTEES, 2007 AND August 1 st Oxford Waterloo Board Region Elgin Essex-Kent Lambton Middlesex Board Region Huron Perth Board Region Bruce Grey Board Region Algoma Cochrane East Nipissing - Parry Sound East Sudbury - West Nipissing Manitoulin - West Sudbury Rainy River Thunder Bay Timiskaming Board Region PROVINCIAL TOTAL 4,508 4,083 3,997 3,925 3,834 3,737 Table 2 (cont d)

10 DISTRIBUTION OF LICENCED MILK PRODUCTION UNITS BY DAILY QUOTA LEVELS, July 2009 and July July 2016 Quota Ranges (kgs) July 2009 July 2012 July 2013 July 2014 July 2015 July Total 4,243 4,083 3,997 3,925 3,834 3,737 Table 3

11 MILK MARKETED 1 FROM LICENCED MILK PRODUCTION UNITS IN ONTARIO, 2006/2007 AND 2011/ /16 Dairy Year - August to July 2006/ / / / / /16 Litres % Litres % Litres % Litres % Litres % Litres % ( 000) ( 000) ( 000) ( 000) ( 000) ( 000) August 200, , , , , , September 195, , , , , , October 198, , , , , , November 194, , , , , , December 204, , , , , , January 206, , , , , , February 185, , , , , , March 207, , , , , , April 205, , , , , , May 216, , , , , , June 208, , , , , , July 214, , , , , , Dairy Year Total 2,437, ,588, ,575, ,529, ,637, ,747, Includes all milk marketed including Food Bank donations (all years) and milk marketed under commercial export (1999/2000 to 2006/2007). Note: Totals may not add exactly due to rounding. Table 4

12 SEASONALITY OF PRODUCTION, 2006/2007 AND 2011/ /16 Average Daily Shipments 1 as a Per Cent of Annual Average Daily Shipments 2 Dairy Year - August to July 2006/ / / / / /16 % % % % % % August September October November December January February March April May June July Annual Average Daily Shipments 2 (thousand litres) 6, , , , , , Total monthly shipments divided by days in the month. 2 Total annual shipments for the dairy year divided by the days in the year. Table 5

13 MILK MARKETED 1 IN ONTARIO BY BOARD REGIONS AND DAIRY PRODUCER COMMITTEES, 2006/2007 AND 2011/ /16 Dairy Year - August to July (thousand litres) 2006/ / / / / /16 Glengarry 69,804 Prescott 105,912 Russell 94,624 Board Region 1 270,340 Carleton 65,037 Dundas 84,713 Stormont 54,352 Board Region 2 204,102 Frontenac 19,798 Grenville 22,695 Lanark 16,223 Leeds 44,769 Renfrew 43,879 Board Region 3 147,365 Hastings 32,566 Lennox & Addington 22,309 Northumberland 42,760 Prince Edward 22,142 Board Region 4 119,779 City of Kawartha Lakes 29,146 Durham Region 59,790 Peterborough 25,576 York 12,317 Board Region 5 126,828 72,098 71,589 72,208 73,981 77, , , , , ,390 91,362 89,632 87,978 90,719 92, , , , , ,415 67,948 66,892 63,576 65,615 67,361 83,476 80,596 77,798 78,531 81,298 55,679 53,710 51,578 53,579 52, , , , , ,586 17,812 17,192 17,136 17,428 17,441 25,568 25,369 24,854 25,700 26,769 14,878 15,253 15,066 15,099 15,210 45,662 45,659 45,220 44,588 47,573 43,829 42,388 40,918 45,512 44, , , , , ,706 29,902 28,444 28,467 28,135 28,819 21,943 21,869 21,894 22,354 23,106 42,256 41,008 41,033 41,926 41,780 20,831 19,850 19,486 19,919 20, , , , , ,309 29,261 29,036 28,534 29,493 31,015 54,768 54, ,283 53,857 24,847 24,817 24,567 24,349 24,582 11,907 11,270 10,765 10,851 11, , , , , ,997 Table 6

14 MILK MARKETED 1 IN ONTARIO BY BOARD REGIONS AND DAIRY PRODUCER COMMITTEES, 2006/2007 AND 2011/ /16 Dairy Year - August to July (thousand litres) 2006/ / / / / /16 Dufferin 23,036 Peel 23,284 Simcoe 45,572 Wellington 189,680 Board Region 6 281,572 Brant 31,259 Haldimand 38,294 Halton 3,283 Niagara 24,340 Norfolk 8,037 Wentworth 17,228 Board Region 7 122,441 Oxford 264,365 Waterloo 110,626 Board Region 8 374,991 Elgin 63,148 Essex-Kent 10,966 Lambton 30,836 Middlesex 94,112 Board Region 9 199,062 22,762 23,319 23,277 24,457 25,853 20,845 20,504 19,615 19,019 17,275 42,793 43,569 42,432 42,516 42, , , , , , , , , , ,073 34,465 34,207 33,349 35,328 37,993 40,075 40,257 39,508 41,452 42,146 3,245 2,930 2,650 2,251 2,317 23,043 22,606 21,814 23,011 24,602 7,890 7,931 7,202 7,426 7,473 19,513 19,409 18,698 19,808 20, , , , , , , , , , , , , , , , , , , , ,182 72,274 71,552 71,178 74,890 78,370 12,318 12,324 11,785 13,249 13,529 35,864 36,819 35,945 39,147 40, , , , , , , , , , ,114 Table 6 (cont d)

15 MILK MARKETED 1 IN ONTARIO BY BOARD REGIONS AND DAIRY PRODUCER COMMITTEES, 2006/2007 AND 2011/ /16 Dairy Year - August to July (thousand litres) 2006/ / / / / /16 Huron 118,267 Perth 246,447 Board Region , , , , , , , , , , , , , , , ,502 Bruce 89,249 97,459 97,855 97, , ,123 Grey 54,263 64,238 64,529 63, ,156 Board Region , , , , , ,278 Algoma 6,002 Cochrane 3,135 East Nipissing-Parry Sound 2,089 East Sudbury-West Nipissing 9,761 Manitoulin-West Sudbury 4,144 Rainy River 4,397 Thunder Bay 19,270 Timiskaming 33,503 Board Region 12 82,301 5,149 5,177 5,129 4,768 4,992 2,531 2,746 2,783 3,079 3,433 1,795 1,636 1,501 1,410 1,148 7,495 7,479 7,361 7,035 6,692 4,529 4,528 4,372 4,469 4,193 4,714 4,309 4,159 4,380 4,305 18,300 18,743 18,652 19,251 20,741 31,789 31,028 29,748 30,890 31,300 76,300 75,646 73,704 75,281 76,804 PROVINCIAL TOTAL 2,437,006 2,588,531 2,575,084 2,529,551 2,637,963 2,747,663 1 Includes all milk marketed including Food Bank donations (all years) and milk marketed under commercial export (1999/2000 to 2006/2007). Note: Totals may not add exactly due to rounding. Table 6 (cont d)

16 ONTARIO WEIGHTED AVERAGE BUTTERFAT TESTS, 2006/2007 AND 2011/ /16 Dairy Year - August to July (kilograms per hectolitre) 2006/ / / / / /16 August September October November December January February March April May June July Month Weighted Average Table 7

17 ONTARIO WEIGHTED AVERAGE PROTEIN TESTS, 2006/2007 AND 2011/ /16 Dairy Year - August to July (kilograms per hectolitre) 2006/ / / / / /16 August September October November December January February March April May June July Month Weighted Average Table 8

18 ONTARIO WEIGHTED AVERAGE OTHER SOLIDS TESTS, 2006/2007 AND 2011/ /16 Dairy Year - August to July (kilograms per hectolitre) 2006/ / / / / /16 August September October November December January February March April May June July Month Weighted Average Table 9

19 ONTARIO WEIGHTED AVERAGE SOLIDS-NOT-FAT 1 TESTS, 2006/2007 AND 2011/ /16 Dairy Year - August to July (kilograms per hectolitre) 2006/ / / / / /16 August September October November December January February March April May June July Month Weighted Average Solids-not-fat (SNF) refers to the solids in the milk other than butterfat including protein, lactose, and minerals. Table 10

20 CANADIAN REQUIREMENTS 1 FOR INDUSTRIAL MILK, (million kg. Butterfat) Class Adjustment 3 Resulting Domestic 5a, 5b & 5c Canadian for Surplus MSQ 4 Growth Requirements 2 Exports Requirements 1 Butterstocks Effective Aug 1 Allowance Aug 1, Aug 1, Aug 1, Aug 1, Aug 1, Table 11 Actual domestic requirements plus Class 5a, 5b and 5c exports for the 12 months ending June. 1 Actual domestic disappearance of industrial milk including historical cheese exports under quota to the E.U., but excluding cheese imports and the skim-off from fluid milk processing. 2 3 Adjustment policy first introduced during the 2009/10 dairy year. 4 Canadian requirement plus adjustment for surplus butterstocks equals MSQ, August 1. Note: Totals may not add exactly due to rounding. Source: Canadian Dairy Commission

21 UTILIZATION OF QUOTA 1 BY PROVINCE, 2011/ /16 Dairy Year - August to July Province Production Quota Utilization Kg B.F. Kg B.F. % Newfoundland 2011/2012 1,879,648 1,992, /2013 1,789,336 1,828, /2014 1,944,737 2,007, /2015 1,958,861 1,987, /2016 1,966,770 2,617, PEI 2011/2012 4,051,625 4,050, /2013 4,142,966 4,059, /2014 4,026,128 4,106, /2015 4,152,223 4,220, /2016 4,395,933 4,315, Nova Scotia 2011/2012 6,870,389 6,870, /2013 7,082,711 6,884, /2014 6,862,837 6,966, /2015 7,211,260 7,159, /2016 7,426,528 7,358, New Brunswick 2011/2012 5,397,369 5,362, /2013 5,502,863 5,374, /2014 5,340,410 5,437, /2015 5,572,491 5,588, /2016 5,824,259 5,736, Québec 2011/ ,645, ,425, / ,535, ,604, / ,971, ,753, / ,000, ,040, / ,250, ,632, Ontario 2011/ ,365, ,417, / ,087, ,701, / ,540, ,150, / ,435, ,030, / ,082, ,881, Table 12

22 UTILIZATION OF QUOTA 1 BY PROVINCE, 2011/ /16 Dairy Year - August to July Province Production Quota Utilization 2 Kg B.F. Kg B.F. % Manitoba 2011/ ,869,315 12,593, / ,639,816 12,517, / ,537,028 12,859, / ,392,025 13,443, / ,405,853 14,040, Saskatchewan 2011/2012 9,057,893 9,023, /2013 8,953,040 8,968, /2014 9,198,334 9,213, /2015 9,548,434 9,631, / ,074,453 10,059, Alberta 2011/ ,392,386 25,893, / ,896,911 25,737, / ,913,473 26,441, / ,604,584 27,641, / ,053,873 28,868, British Columbia 2011/ ,593,348 26,100, / ,879,940 26,008, / ,342,910 26,613, / ,604,584 27,641, / ,304,152 29,058, Canada 2011/ ,122, ,728, / ,510, ,682, / ,678, ,551, / ,701, ,567, / ,785, ,569, Total milk shipments as a per cent of authorized quota (Fluid milk sales + MSQ + Innovation + Growth Allowance + Planned Export Program for Cheese) as defined by the CDC pursuant to the National milk marketing plan and the regional pooling agreements. This is based on a daily weighting of the provincial quota held over the entire dairy year. 2 Over quota penalties were suspended in the 2015/2016 dairy year by decision of the Canadian Milk Supply Management Committee (CMSMC). Source: Canadian Dairy Commission Table 12 (cont d)

23 QUOTA SALES OVER THE EXCHANGE, 2011/ /16 Dairy Year - August to July Daily Quota 2011/ / / / /16 1 Quantity Quantity Quantity Quantity Quantity Month Price Sold Price Sold Price Sold Price Sold Price Sold ($/kg) (kg) ($/kg) (kg) ($/kg) (kg) ($/kg) (kg) ($/kg) (kg) August 25, , , , , September 25, , , , , , October 25, , , , , , November 25, , , , , December 25, , , , , January 25, , , , , February 25, , , , , March 25, , , , , April 25, , , , , May 25, , , , , June 25, , , , , July 25, , , , , Total 3, , , , , Table 13 Per Cent of Provincial Quota Month Weighted Average 25, , , , , Quantity sold on exchange includes applicable non-saleable quota and innovation amounts.

24 SUMMARY OF QUOTA TRANSFERRED IN ONTARIO, 2011/ /16 Dairy Year - August to July Daily Quota 2011/ / / / /16 % of Total % of Total % of Total % of Total % of Total Month Kilograms Transferred Kilograms Transferred Kilograms Transferred Kilograms Transferred Kilograms Transferred Within-Family 12, , , , , On-Going Operations 2, , , , , Sub-Total 14, , , , , Quota Exchange Sales 3, , , , , Total Transferred 18, , , , , Provincial Quota 276, , , , , Total Transferred as Per Cent of Provincial Quota Table 14

25 ONTARIO DAIRY COW AND HEIFER POPULATION, July 1 st (thousand head) Dairy Cows 1 Dairy Heifers All females which have calved, kept mainly for milk purposes. All females, one year old or older, which have never calved, raised for dairy herd replacement. Heifers on cream farms are included. 2 Source: Statistics Canada CANSIM Table 15

26 ESTIMATED MILK SOLD PER DAIRY COW ON ONTARIO DAIRY FARMS, 2011/ /16 Dairy Year - August to July 2011/ / / / /16 Marketings ( 000 Litres) Milk 2,588,531 2,575,084 2,529,772 2,637,963 2,747,663 Dairy Cow Population 1 ( 000 head) Estimated Milk Sold Per Dairy Cow 2 (litres) 8,201 8,200 8,091 8,603 9,089 Average of opening and closing dairy cow numbers for each dairy year. 1 For example: Dairy Cow Population for 2013/14 Dairy Year = (July 1, 2014 Dairy Cow Population + June 30, 2013 Dairy Cow Population) /2. Estimated by dividing total milk and cream marketed by dairy cow population. 2 Source: DFO & Stats Canada: CANSIM Table 16

27 DAIRY CATTLE BREEDINGS: EASTGEN, (Calendar Year) % % % % % % # Change # Change # Change # Change # Change # Change January 12, , , , , , February 10, , , , , , March 11, , , , , , April 10, , , , , , May 10, , , , , , June 9, , , , , , July 9, , , , , , August 10, , , , , , September 11, , , , , , October 12, , , , , , November 11, , , , , December 12, , , , , Total 132, , , , , Table 17 Source: Canadian Dairy Network (CDN) 2 1 Effective July 1, 2011 EastGen amalgamated the operations of Gencor and Eastern Breeders Incorporated. 2 Effective February, 2013 all breeding data is reported by Canadian Dairy Network (CDN)

28 SUMMARY OF MILK RECORDING PROGRAMS IN ONTARIO, Number of Herds (December 31st) Publication 1 2,044 2,035 2,026 1,993 1,941 Management 2 1,077 1,071 1, Total 3,121 3,106 3,046 2,961 2,866 Number of Cows (December 31st) Publication 156,939 Management 81,401 Total 238, , , , ,260 83,912 76,993 74,135 72, , , , ,604 Average Herd Size (December 31st) Publication 77.0 Management 76.0 Total Average Milk Production Per Cow 3 (litres) Publication 9,372 Management 8,453 Total 9,050 9,438 9,572 9,494 9,659 8,490 8,575 8,479 8,600 9,106 9,230 9,156 9,310 Average Fat Production Per Cow 3 (kg) Publication 358 Management 324 Total Table 18

29 SUMMARY OF MILK RECORDING PROGRAMS IN ONTARIO, Average Protein Production Per Cow 3 (kg) Publication 299 Management 268 Total Average BCA 4 Milk Publication Management Total Average BCA 4 Fat Publication Management Total Average BCA 4 Protein Publication Management Total Somatic Cell Counting: Per Cent of Herds Enrolled Publication: Herd records meet Breed Association publication requirements for supervision and test program. Management: Herd records used for management ONLY (supervision and test program does NOT meet Breed Association requirements for publication). Based on 305 day lactaction. BCA: Breed Class Average. Source: CanWestDHI Table 18 (cont d)

30 PROVINCIAL SOMATIC CELL COUNTS, 2011/ /16 PER CENT OF TOTAL PRODUCERS IN Average SCC (in thousands) SIX SCC RANGES, 2015/16 Less 500 & Dairy Year 2011/ / / / /16 than Over August September October November December January February March April May June July Month Simple Average Table 19

31 MILK QUALITY PROGRAM IN ONTARIO The Laboratory Services Division of the University of Guelph tests milk samples for bacteria, somatic cell count, freezing point estimate, and inhibitors according to the criteria established in provincial regulations. Producers are advised if they have a test that is in warning or penalty range by an automated telephone voice response system the day following testing. Producers can obtain their results by calling DFO s automated telephone voice response system, referred to as MILKLINE. Tests are also available on DFO s web site. Results are username and password protected. Producers are penalized if they are in violation of the provincial quality requirements at an increasing rate of $/hl. Penalties are applied to total monthly shipments for the first and successive violations within a rolling 12-month period. Bacteria: Each week, one producer sample is randomly selected for bacteria testing, if the sample contains more than 121,000 individual bacteria cells per millilitre as tested on the Bactoscan FC (BSN) test equipment (122,000 BSN is equivalent to 50,000 Standard Pate Count (SPC)) it is considered a high count test. Six high counts in a rolling three months results in a penalty for the month. A producer is shut-off after incurring four bacteria penalties in rolling 12-month period. Inhibitors: Loads of milk are tested for inhibitors prior to unloading. If a load screens suspect positive, all producer samples from the load are tested using the official test method. If the load is officially positive and disposed of, the offending producer is penalized as well as assessed the losses equal to the value of the other producers milk on the load plus the additional transportation and load disposal costs. A penalty is applied if there is a positive official test. After any infraction, a producer s milk is held under detention until a negative test is obtained from a bulk tank sample. The regulatory thresholds are 0.01 international units for beta lactams and 10 ppb sulfamethazines per millilitre of milk. A producer is shut-off after incurring two positive inhibitor tests in a rolling 12 month period and is not reinstated to the milk market until effective livestock medicine management procedures are in place. Table 20

32 MILK QUALITY PROGRAM IN ONTARIO (continued) Somatic Cell Counts (SCC) 1 : Every pickup, a sample is taken and tested for milk composition and somatic cell content. The weighted average of the samples results is the official monthly test. If three out of four consecutive monthly tests contain 400,000 somatic cells per millilitre or more, a penalty is applied. A producer is shut-off after incurring four SCC penalties in a rolling 12-month period. Freezing Point: A freezing point estimate is done on every sample tested for milk composition and SCC. If the freezing point estimate is greater than or equal to minus degrees Celsius the sample is tested on the cryoscope, the official test to determine the abnormal freezing point. A penalty is applied when the cryoscope freezing point result is greater than minus degrees Celsius. A producer is shut-off after incurring a 4 th penalty in a rolling 12-month period. Non-Grade A Premises: DFO fieldstaff inspect farms. If farm premises are Non-Grade A, a penalty is applied for each month the farm does not meet the regulatory standards. Penalties are applied at increasing rates for each month of non-compliance. The offending producer is shut-off if not in compliance for four months in any 12 month rolling period. Producers are shut-off at the time of inspection if their farm is unsanitary Non-Grade A. 1 SCC limit was changed to 400,000 somatic cells per millilitre as of August 1, 2012 Table 20 (cont d)

33 MILK QUALITY PROGRAM IN ONTARIO, 2011/ /16 Dairy Year - August to July 2011/ / / / /16 Penalty Levels 2 ($ per hectolitre) Bacteria 1st Offence nd Offence rd Offence th Offence Inhibitor 1st Offence nd Offence rd Offence Somatic Cell 1st Offence nd Offence rd Offence th Offence Freezing Point 1st Offence nd Offence rd Offence th Offence Non-Grade A Premises 1st Offence nd Offence rd Offence th Offence Penalties for each offense apply on total monthly shipments of the producer. 3 Shut-off Level (SO). Table 20 (cont d)

34 MILK QUALITY PROGRAM IN ONTARIO, 2011/ /16 Dairy Year - August to July 2011/ / / / /16 Per Cent of Producers Penalized (per month) Bacteria Inhibitors Somatic Cell Freezing Point Non-Grade A Per Cent of Milk Volume Penalized Bacteria Inhibitors Somatic Cell Freezing Point Non-Grade A Penalties Collected (thousand dollars) Bacteria Inhibitors Somatic Cell Freezing Point Non-Grade A Total Average Number of Producers per Month 4,101 4,025 3,958 3,868 3,763 Total Volume of Milk Produced (billion litres) 2,589 2,575 2,530 2,638 2,748 Table 20 (cont d)

35 CLASSIFICATION OF MILK SOLD TO ONTARIO PROCESSING PLANTS NATIONAL HARMONIZED CLASSIFICATION SYSTEM 1 Effective June 1, 2013 Class 1(a) - Milk and milk beverages, partly skimmed or skimmed, whether or not treated for lactose intolerance, whether flavoured or not, with or without vitamins or minerals added, for Retail and Food Service, and egg nog, cordials, cultured milk, concentrated milk to be reconstituted as fluid milk. Class 1(b) - All types of cream with a butterfat content not less than 5% for Retail and Food Service. Class 1(b)ii - Fresh cream with a butterfat content of 32% and higher used to make fresh baked goods which are not eligible for a Class 5 permit. Any utilization in this class would require a Class 1(b)ii permit. Class 1(c) - New 1(a) and 1(b) fluid products for Retail and Food Service as approved by the provincial authorities during an introductory period. Class 1(d) - 1(a) and 1(b) fluid products marketed outside the ten signatory provinces but within the Canadian boundaries, (e.g.: Yukon, NWT, Nunavut & cruise ships). Class 2(a) - All types of yogurts including yogurt beverages, Kefir and Lassi, excluding frozen yogurts. Class 2(b) - All types of ice cream, ice cream mix, whether frozen or not, other frozen dairy products including frozen yogurts, all types of sour cream, all types of milk shake mixes, and fudge, puddings, soup mixes, caffeinate and Indian sweets. Class 3(a) - All cheeses other than those identified in Class 3(b), Class 3(c) and Class 3(d). Class 3(b) - All types of cheddar cheese, stirred curd, cream cheese, creamy cheese bases (cheese mixes), cheddar and cheddar-type cheeses sold fresh. Class 3(c) - All types of Mozzarella except when declared in Class 3(d), Asiago, Brick, Canadian Style, Munster (Muenster), Colby, Farmer, Feta, Gouda, Havarti, Jack, Monterey Jack, Parmesan, Swiss. Class 3(d) - Standardized mozzarella cheeses to be used strictly on fresh pizzas by establishments registered with the CDC under terms and conditions approved by the CMSMC. Class 4(a) - Milk used to process butter, butter oil, casein, sodium caseinate, milk albumen, milk sugar, milk powders, yogourt powder or sour cream powder. Milk used to process any product not within a category of products referred to in another class. Class 4(a1) - Milk components for the manufacture of rennet casein (dry or curd), Milk Protein Concentrate (dry or liquid) or Skim Milk (dry or liquid) to be used in the manufacture of non-standardized final products in the processed cheese category. Table 21

36 CLASSIFICATION OF MILK SOLD TO ONTARIO PROCESSING PLANTS NATIONAL HARMONIZED CLASSIFICATION SYSTEM 1 Effective June 1, 2013 Class 4(b) - Concentrated milk for retail sale whether sweetened or not. Class 4(c) - New industrial products as approved by provincial authorities for an introductory period. Class 4(d) - Inventories and losses. Class 4(m) - Milk components for marginal markets as established from time to time by the CMSMC. Class 5(a) - Cheese used as ingredients for further processing for the domestic and export markets. Class 5(b) - All other dairy products used as ingredients for further processing for the domestic and export markets. Class 5(c) - Dairy products used as ingredients for the confectionery sector destined for domestic and export markets. Class 5(d) - Planned exports and other exports approved by the CMSMC, the total of which shall not exceed Canada s WTO commitments. 1 Harmonized national milk classification system approved by the CMSMC on April 22, 2010 and revisions approved by CMSMC on July 26-27, 2012 and April 19, For a more detailed list of products and their classes, see Ontario Regulation 361/05 under the Milk Act. Table 21 (cont d)

37 ONTARIO CLASS PRICE CHANGES, FEBRUARY, AUGUST, 2016 Butterfat Protein Other Solids Volume Date of Flexibility Flexibility Flexibility Flexibility Class Price Change $/kg Level $/kg Level $/kg Level $/hl SNF Level Class 1(a) - Feb. 1/ Feb. 1/ Feb. 1/ Feb. 1/ Feb. 1/ Class 1(b) - Feb. 1/ Feb. 1/ Feb. 1/ Feb. 1/ Feb. 1/ Class 1(c) Milk 1(c) 1 - Feb. 1/ Feb. 1/ Table 22

38 ONTARIO CLASS PRICE CHANGES, FEBRUARY, AUGUST, 2016 Butterfat Protein Other Solids Volume Date of Flexibility Flexibility Flexibility Flexibility Class Price Change $/kg Level $/kg Level $/kg Level $/hl SNF Level Cream 1(c) 1 - Feb. 1/ Feb. 1/ Class Feb. 1/ Feb. 1/ Class 2(a) 2 - Feb. 1/ Mar. 1/ Feb. 1/ Class 2(b) 2 - Feb. 1/ Mar. 1/ Feb. 1/ Class 3(a) 3 - Feb. 1/ Feb. 1/ Feb. 1/ Mar. 1/ Feb. 1/ Table 22 (cont d)

39 ONTARIO CLASS PRICE CHANGES, FEBRUARY, AUGUST, 2016 Butterfat Protein Other Solids Volume Date of Flexibility Flexibility Flexibility Flexibility Class Price Change $/kg Level $/kg Level $/kg Level $/hl SNF Level Class 3(b) 3 - Feb. 1/ Feb. 1/ Feb. 1/ Mar. 1/ Feb. 1/ Class 3(c) 3 - Feb. 1/ Mar. 1/ Feb. 1/ Class 3(d) 3 - Feb. 1/ Mar. 1/ Feb. 1/ Classes - Feb. 1/ (a) (d) - Feb. 1/ Feb. 1/ Mar. 1/ Feb. 1/ Table 22 (cont d)

40 ONTARIO CLASS PRICE CHANGES, FEBRUARY, AUGUST, 2016 Butterfat Protein Other Solids Volume Date of Flexibility Flexibility Flexibility Flexibility Class Price Change $/kg Level $/kg Level $/kg Level $/hl SNF Level Class 4(b) - Feb. 1/ Feb. 1/ Feb. 1/ Mar. 1/ Feb. 1/ Class 4(a1) - Feb. 1/ Feb. 1/ Feb. 1/ Mar. 1/ Feb. 1/ Table 22 (cont d) 1 As of August 2012 per current P5 policy for the 1c/4c Pricing Program for innovative products, the price discounts for milk cream and manufactured dairy products are respectively 25% for the 1st 12 months, 15% for the 2nd 12 months and 10% for the 3rd 12 months off the appropriate P5 target class component prices for approved products. 2 As of May 1, 2013 Class 2a and Class 2b replaced class 2. 3 As of May 1, 2013 Class 3c and Class 3d have been created. Note: Refer to Table 21 for class descriptions under the harmonized classification system.

41 SPECIAL CLASS PRICES, 2011/ /16 Dairy Year - August to July Special Class Butterfat Protein Other Solids Volume Price 2 $/kg $/kg $/kg $/hl Dairy Year Weighted P10 Averages 1 Special Class 5(a) 2011/ / / / / Special Class 5(b) 2011/ / / / / Special Class 5(c) 2011/ / / / / Special Class 5(d) 2011/ / / / / P10 averages as calculated by the Canadian Dairy Commission. Prices shown for $ per hectolitre based on the average composition for Ontario milk for the dairy year. Source: Canadian Dairy Commission. Table 23

42 ONTARIO EXCLUSION FACTOR 1, 2006 AND (Per Cent) Effective Date August 1, August 1, August 1, August 1, August 1, August 1, August 1, The exclusion factor is used to calculate the volume of milk to be excluded from MSQ shipments in Ontario under the national supply management program. The adjustment is made to the Ontario Class 1 sales volume to make it conform to the national definition of fluid milk which includes the skim-off left over from the processing of fluid milk and cream products in addition to the actual Class 1 sales volume. Table 24

43 1 2 3 CLASS PRICES AT 3.6 KG OF BUTTERFAT PER HL, October ($ per hectolitre) Year Class (1(a) Class 1(b) Class 2 1 Class 2(a) 1 Class 2(b) 1 Class 3(a) 2 Class 3(b) Class 3(c) 2 Class 3(d) 2 Class As of May 1, 2013 Class 2(a) and Class 2(b) replaced Class 2. Data is reported under Class 2 for 2012/13. As of May 1, 2013 Class 3(c) and Class 3(d) have been created. Data is reported with Class 3(a) for 2012/13 and prior years. Class 4(a) price. Note: Prices based on the average composition for Ontario milk recalculated on a rolling 12-months basis. Table 25

44 1 2 3 CLASS PRICES AT AVERAGE COMPOSITION, October ($ per hectolitre) Year Class (1(a) Class 1(b) Class 2 1 Class 2(a) 1 Class 2(b) 1 Class 3(a) 2 Class 3(b) Class 3(c) 2 Class 3(d) 2 Class As of May 1, 2013 Class 2(a) and Class 2(b) replaced Class 2. Data is reported under Class 2 for 2012/13. As of May 1, 2013 Class 3(c) and Class 3(d) have been created. Data is reported with Class 3(a) for 2012/13 and prior years. Class 4(a) price. Note: Prices based on the average composition for Ontario milk recalculated on a rolling 12-month basis. Table 26

45 ONTARIO PRODUCER GROSS AND NET RETURNS FOR MILK MARKETINGS UNDER QUOTA, 2006/2007 and 2011/ /16 Dairy Year - August to July ($ per hectolitre) 2006/ / / / / /16 Gross Returns August September October November December January February March April May June July Month Wtd Average Net Returns 1 August September October November December January February March April May June July Month Wtd Average Net of transportation, administration, promotion, and Ontario DHI fees. Table 27

46 INDUSTRIAL SUPPORT PRICE STRUCTURE, 2006 AND Effective Date Feb. 1 Feb. 1 Apr. 1 Feb. 1 Mar. 1 Feb. 1 Federal Support Price ( per kg) Butter $ $ $ $ $ $ Skim Milk Powder Market Price Guarantee 1 per hl Assumed Processor Margin per hl Target Price for Butter/Powder per hl Domestic Butter Program 2 Charges per hl Estimated Producer Market Returns per hl Market Price Guarantee = (Butter Support Price x yield factor) + (Skim Milk Powder Support Price x yield factor). The yield factors represent the amount of butter and skim milk powder that can be manufactured from one hectolitre of milk at 3.6 kilograms of butterfat per hectolitre. As of February 1, 2006, the standard product yields were increased to kilograms for butter and kilograms for skim milk powder from kilograms and 8.51 kilograms respectively. 1 The target price for butter/powder includes a charge to finance the storage and marketing costs associated with the domestic butter program operated by the Canadian Dairy Commission. 2 Source: Canadian Dairy Commission Table 28

47 DFO PRODUCER DEDUCTIONS, 2007 AND ($ per hectolitre) Date of Administration Market Ontario CQM Change of the Board Expansion DHI Research Administration 1 Total 2007 February February February 1 Table February February February 1 1 CQM administration deduction began in March 2010.

48 PRODUCER TRANSPORTATION CHARGES, ONTARIO, 2006/07 AND 2011/ /16 August to July ($ per hectolitre) Dairy Year Weighted Average 2006/ / / / / / Table 30

49 NATIONAL COST OF PRODUCTION REFERENCE FOR FEBRUARY 1, 2016 Background The National COP is used as a guide by the Canadian Dairy Commission (CDC) in establishing support prices for butter and skim milk powder. Changes in support prices provide a common reference for producer milk price adjustments at the provincial level. The objective of the policy is to provide a level of returns to producers that will cover the weighted average cost of production of 50 per cent of Canadian milk. The National Cost of Production is normally reviewed by the CDC in early December with any resulting support price adjustments being implemented on February 1. The background COP data for the February 1, 2016 price adjustment is summarized below. The actual change in support prices implemented by the CDC for February 1, 2016 provided for an overall producer industrial milk price increase of 2.2 per cent. Estimated National COP at time of Feb 1, 2016 Price Increase 2014 National Weighted Average COP for producers in National COP Sample of 234 producers $79.24/hl Indexation factor 3.11% 2014 National Weighted Average COP for producers indexed to the third quarter of 2015 $79.18/hl Table 31

50 CASH RECEIPTS FROM MILK SOLD OFF ONTARIO FARMS, 2011/ /16 Dairy Year - August to July (thousand dollars) 2011/ / / / /16 Gross Receipts : Delivered as Milk 1,907,922 1,895,314 1,937,128 1,952,738 1,925,932 Deductions Transportation & Handling 68,292 67,830 71,033 70,824 71,943 Administration 15,500 15,855 15,553 16,352 17,305 Promotion & Advertising 33,749 36,108 37,934 39,557 41,202 Other Fees Including Ontario DHI 2,140 2,185 2,252 2,355 2,415 Total Deductions 119, , , , ,865 Net Receipts 1,788,241 1,773,337 1,810,356 1,823,650 1,793,067 Note: Totals may not add exactly due to rounding. Source: Statistics Canada Table 32

51 PROVINCIAL UTILIZATION 1,2,3,4 OF MILK SOLD BY DFO, 2007/2008 AND 2011/ /16 Dairy Year - August to July 2007/ / / / / /16 Class Litres % Litres % Litres % Litres % Litres % Litres % ( 000) ( 000) ( 000) ( 000) ( 000) ( 000) % 1(a) + 1(c) 1,041, ,040, ,010, ,004, , , (b) 102, , , , , , , , , (a) , , , (b) , , , (a) 2 384, , , , , , (b) 377, , , , , , (c) , , , , , (d) , , , , , excl. 4(m) 162, , , , , , (a) 64, , , , , , (b) 45, , , , , , (c) 98, , , , , , (d) + 4(m) 265, , , , , , Total 2,657, ,695, ,680, ,621, ,731, ,819, As of May 1, 2013 Class 2a and Class 2b replace Class 2. Data is reported under Class 2 for 2012/13. 2 As of May 1, 2013 Classes 3c and 3d have been created from Class 3a. Data is reported with Class 3a for 2012/13. 3 Harmonized milk classification system implemented October 1, 1996 and revised July 1, 2005 and again on April 22, Includes milk received from other provinces under the P5 pooling agreement. Note: Refer to Table 21 for class descriptions under the harmonized classification system. Source: Canadian Dairy Commission Table 33

52 PROVINCIAL COMPONENT UTILIZATION 1,2,3,4 OF MILK SOLD BY DFO, 2015/16 Utilization Dairy Year - August to July Class Volume Butterfat Protein Other Solids litres % Kg % kg % kg % 1(a) 954,744, ,171, ,711, ,554, (b) 120,887, ,484, ,483, ,034, (a) 1 95,941, ,422, ,268, ,644, (b) 1 60,832, ,949, ,794, ,104, (a) 2 117,778, ,766, ,956, ,851, (b) 357,773, ,358, ,698, ,184, (c) 2 303,298, ,255, ,198, ,502, (d) 2 17,892, , , ,031, excl. 4(m) 198,761, ,047, ,910, ,187, (a) 83,434, ,262, ,843, ,900, (b) 52,941, ,140, ,999, ,456, (c) 79,401, ,207, ,679, ,608, (d) + 4(m) 375,879, , ,314, ,980, Table 34 Total 2,819,568, ,144, ,454, ,040, As of May 1, 2013 Class 2a and Class 2b replace Class 2. 2 As of May 1, 2013 Classes 3c and 3d have been created. 3 Harmonized milk classification system implemented October 1, 1996 and revised July 1, 2005 and again on April 22, Includes milk received from other provinces under the P5 pooling agreement. Note: Refer to Table 21 for class descriptions under the harmonized classification system. Source: Canadian Dairy Commission

53 ONTARIO FLUID MILK AND CREAM SALES: HARMONIZED CLASSIFICATION SYSTEM, 2011/ /16 Dairy Year - August to July (litres) Class 2011/ / / / /16 Fluid Milk Class 1(a) 1,040,749,518 1,010,492,964 1,004,678, ,114, ,744,212 Fluid Cream Class 1(b) 111,617, ,906, ,794, ,001, ,887,538 Total Fluid Milk and Cream 1,152,366,831 1,124,399,334 1,122,472,922 1,109,116,287 1,075,631,750 Note: Refer to Table 21 for class descriptions under the harmonized classification system. Source: Canadian Dairy Commission Table 35

54 ONTARIO PRODUCTION OF SPECIFIED DAIRY PRODUCTS, 2006/07 AND 2011/ /16 Dairy Year - August to July 2006/ / / / / /16 (thousand kilograms) Creamery Butter 22,464 Cheddar Cheese 42,539 Specialty Cheese 59,725 Yogurt 56,423 27,204 25,532 22,981 24,011 27,353 39,776 45,230 23,127 43,784 49,720 64,619 67,152 71,102 69,650 83,052 62,168 59,889 56,269 62,709 67,527 (thousand litres) Sour Cream 22,996 Ice Cream Hard Type 201,930 Soft Type 4,796 17,762 19,012 18,096 16,227 17, , , , , ,610 5,005 4,583 3,738 3,835 6,180 Ice Cream: Total 206, , , , , ,789 Note: Totals may not add exactly due to rounding. Sources: Statistics Canada (Tables , , ) Table 36

55 DISTRIBUTION OF ONTARIO DAIRY PROCESSING PLANTS BY VOLUME 1 OF MILK RECEIVED, FLUID AND INDUSTRIAL PLANTS, 2011/ /16 Dairy Year - August to July 2011/ / / / /16 Volume Range Plants Volume Plants Volume Plants Volume Plants Volume Plants Volume (litres) # % litres % # % litres % # % litres % # % litres % # % litres % ( 000) ( 000) ( 000) ( 000) ( 000) 0-5,000, , , , , , ,000,001-10,000, , , , , , ,000,001-25,000, , , , , , ,000,001-50,000, , , , , , ,000,001- and over ,231, ,233, ,142, ,324, ,376, Total ,695, ,681, ,621, ,731, ,819, Volume includes milk received from out-of-province under the P5 pooling agreement. Table 37

56 DISTRIBUTION OF ONTARIO DAIRY PROCESSING PLANTS BY PRODUCT TYPE 1, 2011/ /16 Number of Plants Dairy Year - August to July 2011/ / / / /16 Fluid Plants Industrial Plants by Major Product Specialty Products Variety Cheeses Butter, Powder and Evaporated Milk Cheddar Cheese Total Industrial Plants Total Plants Major product category for a plant has been determined on the basis of the Class (or Classes) of milk representing the highest utilization of total milk received by the plant during the dairy year. Table 38

57 COMPOSITION OF THE ONTARIO MILK TRANSPORT SECTOR, August Number of Transporters Number of Vehicles Single Axle Straight Trucks Tandem Axle Straight Trucks Tri-Axle Straight Trucks Four Axle Combination Unit (single axle tractor and tandem trailer) Five Axle Combination Unit (tandem tractor and tandem trailer) Six Axle Combination Unit (tandem tractor and tri-axle trailer) or 8 Axle Combination Unit (tandem tractor and 4 or 5 axle trailer) Total Units Since many of the tractor trailers are used as both pickup units and pumpover units, the format has been changed in order to identify the number and type of tractor trailers and no longer distinguish between pickup and pumpover units data revised from figures previously published. Table 39

58 ONTARIO FLUID MILK SALES, 2006 AND Sales Volume (Calendar Year) Standard and Special Milk 3.25% B.F. and up ( 000 L) 142, , , , , ,367 Partly Skimmed Milk 1.9% to 2.1% B.F. ( 000 L) 509, , , , , ,005 Partly Skimmed Milk 0.9% to 1.1% B.F. ( 000 L) 237, , , , , ,407 Skim Milk Under 0.3% B.F. ( 000 L) 107, , ,215 98,253 95,130 78,313 Chocolate Milk and/or Dairy Drink ( 000 L) 80,600 95,743 86,214 86,239 93,265 95,444 Buttermilk ( 000 L) 6,140 3,999 3,949 5,196 4,549 4,095 Total Fluid Milk ( 000 L) 1,084,291 1,074,487 1,046,742 1,052,722 1,067, ,631 Population as of July 1st ( 000) 12, , , , , ,792.1 Litres Per Capita Sources: Statistics Canada ( , ) Table 40

59 QUOTA ENTITLEMENT, P5 POOL, AUGUST 1, (million kg butterfat) August 1 August 1 August 1 August 1 August 1 Province PEI Nova Scotia New Brunswick Quebec Ontario TOTAL QUOTA Source: Canadian Dairy Commission. Note: Totals may not add exactly due to rounding. Table 41

60 UTILIZATION OF QUOTA 1, P5 POOL, 2011/ /16 Dairy Year - August to July 2011/ / / / /16 Production Utilization Production Utilization Production Utilization Production Utilization Production Utilization Province Mkg B.F. % Mkg B.F. % Mkg B.F. % Mkg B.F. % Mkg B.F. % PEI Nova Scotia New Brunswick Québec Ontario TOTAL Total milk shipments as a per cent of authorized quota (Fluid milk sales + MSQ + Innovation + Growth Allowance + Planned Export Program for Cheese) as defined by the CDC pursuant to the National milk marketing plan and the regional pooling agreements. This is based on a daily weighting of the provincial quota held over the entire dairy year. Source: Canadian Dairy Commission Table 42

61 YEAR END CALCULATION OF SNF ABOVE RATIO, 2011 to 2016 Dairy Year - August to July Under continuous quota (2008/09), no year-end adjustments for over-quota milk Production Ratio Target Production Ratio/ BF Kg of SNF SNF/BF Ratio SNF/BF Ratio Target Ratio (in quota) (in quota) (kg of SNF/BF) % % 2011/2012 Prince Edward Island 4,051,625 9,132, Nova Scotia 6,870,389 15,562, New Brunswick 5,397,369 12,243, Québec 118,645, ,194, Ontario 102,365, ,953, Total P5 237,330, ,087, /2013 Prince Edward Island 4,084,837 9,184, Nova Scotia 6,897,214 15,466, New Brunswick 5,343,588 11,933, Québec 119,660, ,229, Ontario 102,271, ,743, Total P5 238,257, ,558, /2014 Prince Edward Island 4,026,128 8,926, Nova Scotia 6,862,837 15,437, New Brunswick 5,340,410 11,894, Québec 118,951, ,986, Ontario 102,515, ,998, Total P5 237,697, ,243, Table 43

62 YEAR END CALCULATION OF SNF ABOVE RATIO, 2011 to 2016 Dairy Year - August to July Under continuous quota (2008/09), no year-end adjustments for over-quota milk Production Ratio Target Production Ratio/ BF Kg of SNF SNF/BF Ratio SNF/BF Ratio Target Ratio (in quota) (in quota) (kg of SNF/BF) % % 2014/2015 Prince Edward Island 4,152,223 9,154, Nova Scotia 7,211,260 16,111, New Brunswick 5,572,491 12,327, Québec 123,000, ,343, Ontario 107,435, ,022, Total P5 247,371, ,958, /2016 Prince Edward Island 4,395,933 9,642, Nova Scotia 7,426,528 16,665, New Brunswick 5,824,259 12,899, Québec 126,250, ,456, Ontario 110,683, ,934, Total P5 254,580, ,598, Source: Canadian Dairy Commission Table 43 (cont d)

63 P5 WEIGHTED AVERAGE COMPONENT TESTS, 2011/ /16 Dairy Year - August to July (kilograms per hectolitre) 2011/ / / / /16 Other Other Other Other Other Province Butterfat Protein Solids Butterfat Protein Solids Butterfat Protein Solids Butterfat Protein Solids Butterfat Protein Solids PEI Nova Scotia New Brunswick Quebec Ontario P5 Weighted Average Source: Canadian Dairy Commission Table 44

64 P5 DAILY QUOTA EXCHANGE PRICES, 2014/ /16 Dairy Year - August to July ($ per kilogram) PEI Nova Scotia New Brunswick Québec Ontario Month 2014/ / / / / / / / / /16 August 25, , , , , , September , , , , , , , October 25, , , , , , , , November 25, , , , , , , , , , December 25, , , , , , , , , , January 25, , , , , , , , February , , , , , , , , , March , , , , , , , , April 25, , , , , , , , , May , , , , , , , , , June 25, , , , , , , , , , July 25, , , , , , , , , , Dairy Year Weighted Average 3 25, , , , , , , , , , No quota exchange price established. No quota exchange held. Weighted by quota purchases Table 45

65 P5 POOL CLASS PRICES, Fluid Prices Effective February 1, 2016 Component Prices Volume Price 1 Average Protein & Standardized 2 Ontario Butterfat Other 3.6 kg/hl Composition 3 Class $/kg $/hl $/hl $/hl Class 1 (a) Class 1 (b) Industrial Prices Effective February 1, 2016 Average Other Standardized 2 Ontario Butterfat Protein 3.6 kg/hl Composition 2 $/kg $/kg $/kg $/hl $/hl Class 2 (a) Class 2 (b) Class 3 (a) Class 3 (b) Class 3 (c) Class 3 (d) Class 4 (a) Class 4 (b) Class 1 prices reflect the actual price in all P5 provinces. Class 2 to 4 prices reflect prices in effect in Ontario and Québec. Class 2 to 4 prices are about 2 per cent lower in PEI and 1 per cent lower in Nova Scotia and New Brunswick. 2 Prices based on standardized milk as defined by the CDC. 3 Prices based on the average composition for Ontario milk for the 12 months ending February As of May 1, 2013 Class 2a and Class 2b replaced Class 2. 5 As of May 1, 2013 Class 3c and Class 3d have been created. Note: Refer to Table 21 for class descriptions under the harmonized classification system. Table 46

66 P5 TARGET PRICE CHANGES, FEBRUARY, AUGUST, 2016 Date of Butterfat Protein Other Solids Volume Class Price Change $/kg $/kg $/kg $/hl SNF Class 1(a) - Feb. 1/ Feb. 1/ Feb. 1/ Feb. 1/ Feb. 1/ Class 1(b) - Feb. 1/ Feb. 1/ Feb. 1/ Feb. 1/ Feb. 1/ Class Feb. 1/ Apr. 1/ Class 2(a) 2 - Feb. 1/ Mar. 1/ Feb. 1/ Class 2(b) 2 - Feb. 1/ Mar. 1/ Feb. 1/ Class 3(a) 3 - Feb. 1/ Apr. 1/ Feb. 1/ Mar. 1/ Feb. 1/ Class 3(b) - Feb. 1/ Apr. 1/ Feb. 1/ Mar. 1/ Feb. 1/ Class 3(c) 3 - Feb. 1/ Mar. 1/ Feb. 1/ Table 47

67 P5 TARGET PRICE CHANGES, FEBRUARY, AUGUST, 2016 Date of Butterfat Protein Other Solids Volume Class Price Change $/kg $/kg $/kg $/hl SNF Class 3(d) 3 - Feb. 1/ Mar. 1/ Feb. 1/ Classes 4(a,d) - Feb. 1/ Aug.1/ Feb. 1/ Apr. 1/ Feb. 1/ Mar. 1/ Feb. 1/ Class 4(b) - Feb. 1/ Apr. 1/ Feb. 1/ Mar. 1/ Feb. 1/ Class 4(a1) - Feb. 1/ Apr. 1/ Feb. 1/ Mar. 1/ Feb. 1/ Fluid milk or cream receiving temporary pricing discount under an innovation program. 2 As of May 1, 2013 Class 2a & 2b replaced class 2. Data is reported under Class 2 for 2012/13. 2 As of May 1, 2013 Class 3c & 3d have been created from Class 3a. Data is reported under Class 3a for 2012/13. Note: Refer to Table 21 for class descriptions under the harmonized classification system. Table 47 (cont d)

68 P5 WITHIN-QUOTA PRICES, 2011/ /16 Dairy Year - August to July Component Prices Volume Average 2 Other Standardized 1 Ontario Butterfat Protein 3.6 kg/hl Composition Date $/kg $/kg $/kg $/hl $/hl August August August August August September September September September September October October October October October November November November November November December December December December December January January January January January February February February February February Table 48

69 P5 WITHIN-QUOTA PRICES, 2011/ /16 Dairy Year - August to July Component Prices Volume Average 2 Other Standardized 1 Ontario Butterfat Protein 3.6 kg/hl Composition Date $/kg $/kg $/kg $/hl $/hl March March March March March April April April April April May May May May May June June June June June July July July July July Dairy Year Weighted Averages 2011/ / / / / Prices based on standardized milk as defined by the CDC. Prices based on the average composition for Ontario milk for the dairy year the month falls in. Source: Canadian Dairy Commission Table 48 (cont d)

70 P5 VOLUME UTILIZATION OF MILK BY CLASS, 2011/ /16 Dairy Year - August to July 2011/ / / / /16 Class 000 L % 000 L % 000 L % 000 L % 000 L % 1(a) 1,784, ,752, ,703, ,697, ,664, (b) 170, , , , , (c) , , , (a) , , , (b) , , , (a/c/d) 2 1,271, ,238, , , , (b) 859, , , , , (c) , , , (d) , , , excl. 4(m) 417, , , , , (a) 185, , , , , (b) 108, , , , , (c) 134, , , , , (d) + 4(m) 567, , , , , Total 5,912, ,936, ,817, ,016, ,238, As of May 1, 2013 Class 2a and Class 2b replace Class 2. Data is reported under Class 2 for 2012/13. 2 As of May 1, 2013 Classes 3c and 3d have been created. Data is reported with Class 3a for 2012/13. Source: Canadian Dairy Commission. Table 49

71 P5 COMPONENT UTILIZATION BY CLASS, 2015/16 Utilization Dairy Year - August to July Volume Butterfat Protein Other Solids Class litres % kg % kg % kg % 1(a) 1,664,571, ,447, ,205, ,121, (b) 184,127, ,295, ,272, ,079, (c) 295, , , , (a) 1 393,820, ,610, ,597, ,077, (b) 1 89,846, ,048, ,616, ,502, (a) 2 392,612, ,539, ,140, ,335, (b) 761,256, ,874, ,663, ,177, (c) 730,858, ,040, ,136, ,951, (d) 216,467, ,402, ,306, ,413, excl. 4(m) 452,638, ,506, ,669, ,847, (a) 167,707, ,618, ,678, ,735, (b) 106,297, ,032, ,668, ,377, (c) 140,725, ,022, ,780, ,187, (d) + 4(m) 936,877, ,242, ,203, ,921, Total 6,238,104, ,684, ,951, ,746, As of May 1, 2013 Class 2a and Class 2b replace Class 2. Data is reported under Class 2 for 2012/13. 2 As of May 1, 2013 Classes 3c and 3d have been created. Data is reported with Class 3a for 2012/13. Table 50

72 P5 FLUID PROMOTION BUDGET, 2011/ /16 Dairy Year - August to July Dairy Year Total P5 Fluid Promotion 2011/12 $34,277, /13 $35,762, /14 $36,969, /15 $37,494, /16 $37,631,648 Sources: Dairy Farmers of Canada FPLQ Table 51

73 P5 TRANSPORTER COST PER Hl, 2015/16 AND 2011/12 to 2015/16 (Dairy Year - Weighted Average) Current Dairy Year 2015/16 PEI Nova Scotia New Brunswick Québec Ontario P5 August September October November December January February March April May June July Dairy Year Weighted Average Year Dairy Year History PEI Nova Scotia New Brunswick Québec Ontario P5 2011/ / / / / Source: Canadian Dairy Commission Table 52

74 P10 PRODUCER SHARE OF DAIRY PRODUCTS CALENDAR YEAR 2015 $ % $ % % Total Farm Per Cent Total Retail Value Per Cent of Farm Value Sales/Domestic Value of Sales (or of Total of Sales (or Domestic Total as Per Cent of Product Description Disappearance Domestic Disappearance) Farm Value Disappearance) Retail Value Retail Value Fluid Milk Sales ( 000 litres) Standard 355, ,246, ,912, % 1,238,510 1,101,035, ,746,299, % 503, ,228, ,377, Skim 201, ,394, ,862, Other Milk 1 235, ,346, ,218, Fluid Milk Sub-Total 2,534,363 2,221,251, ,965,669, Cream Sales ( 000 litres) Cereal Cream 113, ,151, ,632, Table Cream 140, ,347, ,714, Whipping Cream 47, ,634, ,910, Cream Sub-Total 301, ,133, ,223,258, Total Fluid and Cream 2,835,788 2,776,384, ,188,928, Table 53 Major Industrial Milk Products (tonnes) Cheddar Cheese 146,570 1,074,973, ,068,102, Specialty Cheese 272,188 1,992,195, ,625,386, Cottage Cheese 21,363 52,557, ,045, Cheese Sub-Total 440,121 3,119,726, ,841,534, Butter 88, ,572, ,793, Skim Milk Powder 97, ,419, ,971, Ice Cream and Mixes 254, ,576, ,697, Yogurt 405, ,139, ,987,949, Other Products Sub-Total 757, ,136, ,610,618, Total Industrial 1,286,444 4,654,435, ,232,946, Total Fluid, Cream and Industrial 4,122,232 7,430,820, ,421,874, Other Milk Includes Buttermilk and Chocolate Drink.

75 FARM INPUT PRICE INDEXES (2002 = 100), EASTERN CANADA, Calendar Year % % % % Farm Inputs Index Index Change Index Change Index Change Index Change Total Farm Inputs Buildings Machinery & Motor Vehicles Depreciation on Machinery Depreciation on Vehicles Machinery Fuel Machinery Repairs Commercial Seed & Plants Fertilizer & Lime Livestock Purchases Feed Prepared Feed Grain Feed Notes: The Farm Input Price Index, 2002 = 100, measures the price changes of a basket of goods and services for use in agricultural production. Because the basket of inputs used for the 2002 base weight is fixed, the index should not be interpreted as a measure of production cost movements due to changes in the composition of the basket of inputs (substitution effect), nor does it reflect changes in productivity which took place in a period subsequent to the base year. Source: CANSIM, Statistics Canada Table 54

76 CONSUMER PRICE INDEXES FOR ONTARIO (2002 = 100), Calendar Year Consumer Price Index Index % % % % % Change Index Change Index Change Index Change Index Change All-items Food Food purchased from stores Food purchased from restaurants Dairy products Fresh milk Butter Cheese Fats and oils Coffee and tea Non-alcoholic beverages Beef Pork Poultry Eggs Fresh fruit Fresh vegetables Bakery and Other Cereal Products Source: CANSIM Table , Statistics Canada Table 55

77 DATES OF HISTORICAL INTEREST 1965 The Ontario Milk Marketing Board established November 1 st Group I Price Pooling commenced March 1 st Classified Pricing established April 1 st. Group II Pool established April 1 st. Plant Supply Quotas established for Class 5 and Class 5(a) industrial milk. Market Sharing Quota Program for industrial use was introduced December 1 st Milk Quality Penalty Program introduced June 1 st Ontario Dairy Farm Accounting Project commenced Discontinuation of marketing milk in cans October 31 st Conversion from imperial to metric measure April 1 st MSQ year changed from April 1 - March 31 to August 1 - July 31 effective August 1 st All producers required to meet Grade A bacterial requirements as of February. Quota Exchange introduced in March for the purchase/sale of Group I Pool quota or used and unused MSQ. A single pooled transportation charge for producers in Southern Ontario became effective July 1 st Ontario Dairy Herd Improvement Corporation established April 1 st. Single Milk Quality Standard: All producers required to meet Grade A standards for farm premises as of September 1 st Udder Health Management Program commenced in April Fresh Milk Sampling and Testing introduced March 1 st. Ontario Dairy Herd Improvement Corporation (ODHIC) and the Record of Performance (ROP) milk recording services consolidated effective July 1 st. Plant Supply Quotas extended in October to include Classes 4(a) and 4(b) specialty cheese utilization as an interim measure while a quota/auction proposal for the milk supply allocation system was under review Effective August 1st, the Plant Supply Quota system initiated in October, 1985 was adopted on a permanent basis with plant supply quotas for specialty cheese (Class 4(a) and 4(b)), cheddar cheese (Class 5(a)), and butter/powder (Class 5) to be adjusted at the beginning of each dairy year to reflect national demand for each product over the two previous calendar years Penalty program for high somatic cell counts introduced August 1st Effective August 1 st, market sharing quotas (MSQ) issued in kilograms of butterfat instead of litres of milk. A one-year seasonality program to encourage fall milk production introduced August, A long-term seasonality policy commenced August 1 st for Southern Ontario. Table 56

78 DATES OF HISTORICAL INTEREST 1992 Multiple Component Pricing (MCP) implemented January 1 st. Belleville Cheese Exchange discontinued with April 6 th being the date of the last exchange. Within and over-quota levies collected on a component basis across all milk as of August 1 st. Federal Government announced in December the intention to reduce federal subsidy payments on industrial milk by 20 per cent between August 1, 1993 and August 1, An agreement was reached by the Ontario Farm Products Marketing Commission, the Ontario Cream Producers Marketing Board and The Ontario Milk Marketing Board to allow cream producers to convert 100 per cent of their cream quota to milk quota beginning August 1, Single pool, payment and quota system implemented August 1 st The Ontario Milk Marketing Board and the Ontario Cream Producers Marketing Board Amalgamated on August 1 st to become Dairy Farmers of Ontario. P6 Pooling Agreement reached between the 6 eastern provinces (Prince Edward Island, Nova Scotia, New Brunswick, Québec, Ontario, Manitoba) on April 18, Common promotion fund and market sharing provisions of the P6 Agreement implemented August 1, Special Class Pricing and Pooling implemented August 1 st. The maximum quota allotment policy was removed effective August 1 st. In its place a series of screening levels were introduced which producers cannot exceed without first obtaining DFO s approval. Food Bank Program for fluid milk products initiated by DFO, ODC and OMTA in August. Program participation is voluntary. Producers donate a portion of their shipments to the program. Milk transporters transport the donated milk free of charge. Participating dairy processors process and package the donated milk free of charge. The resulting products are donated to the Food Bank Federal Government announced in March that the federal dairy subsidy program was to be phased out completely over the next five years. A minimum quota requirement of 1,825 kilograms (5 kg/day) introduced June 27 th. Within-quota levies eliminated August 1 st. Revenue pooling initiated under the P6 Pooling Agreement effective August 1 st. Interprovincial quota exchange commenced between Québec and Nova Scotia August 1 st. Harmonized milk classification and end-use component pricing provisions of the P6 Pooling Agreement implemented October 1 st. The volume class differentials were eliminated. The 15 per cent quota transfer assessment was eliminated, effective for the December quota exchanges and January 1, 1997 for sales of on-going operations and the establishment of non-family partnerships and corporations Manitoba joined the Western Milk Pool as of March. First province wide Optional Export Program (OEP) contract initiated in June. Daily quota system implemented August 1 st. Uniform promotion fee established for P5 August 1 st. DFO commenced participation in the interprovincial quota exchange with Quebec and Nova Scotia September 1 st. First individual (OEP) contract initiated in November Ontario withdrew from the interprovincial quota exchange in March. DFO took over the responsibility for the raw milk quality program from the Ontario Ministry of Agriculture, Food and Rural Affairs effective March 25 th. Pooling of transportation costs across the P5 commenced August 1 st. Table 56 (cont d)

79 DATES OF HISTORICAL INTEREST 1999 WTO ruled on October 27 th that Canada s special classes 5(d) and 5(e) constitute an export subsidy under Article 9.1(c) of the Agreement on Agriculture Commercial export contracting through 3rd Party Administrator implemented in July The United States and New Zealand launched a WTO challenge against Canada on February 16 th. The legitimacy of the commercial contracting systems for export milk that were implemented by all provinces following the 1999 WTO Ruling against Canada on special classes 5(d) and 5(e) was challenged. The essence of the challenge was that the commercial export contracting, like special classes 5(d) and 5(e), still constituted an export subsidy. The WTO Compliance Panel ruled on July 11 th in favour of the United States and New Zealand. The WTO Appellate Body over turned the Compliance Panel s decision on December 3 rd on the grounds that United States and New Zealand had failed to prove that commercial contracting for export milk was WTO inconsistent. A new process for the same Compliance Panel to re-examine the case, taking into account the Appellate Body s ruling, was initiated by the WTO on December 18 th at the request of United States and New Zealand. DFO received a $2 million grant from the Ontario Government s Early Years Challenge Fund to support the expansion of the DFO Elementary School Milk Program. DFO received a $2.7 million grant from the Ontario Government s Healthy Futures for Ontario Agriculture Program to assist in the development and implementation of its Dairy Quality Assurance Program based on HACCP principles Federal Direct Payment discontinued February 1 st. The 2 nd WTO Compliance Panel ruled against Canada s Commercial export contracting system for export milk in June. Specifically, they found that Canada was acting inconsistently with respect to its obligations under Articles 3.3 and 8 of the Agreement on Agriculture by providing export subsidies within the meaning of Article 9.1(c) through export contracting and the continued operation of Special Class 5(d). The decision was appealed by Canada. In December, the WTO Appellate Body upheld the 2 nd Compliance Panel s Ruling forcing Canada to cancel commercial export contracting and re-regulate the marketing of milk for export Requirements for Ontario Dairy Quality Assurance Program finalized by DFO Board in May. Program requirements (Livestock Medicines Certificate, Potable Water, Time Temperature Recorders, Standard Operating Procedures) to be phased-in and fully implemented by January 1, Bovine Spongiform Encephalopathy (BSE) confirmed in Alberta beef cow on May 20 th. The United States and other countries subsequently closed borders to Canadian cattle and beef exports. United States border re-opened to boneless beef exports from cattle under 30 months of age in August. Canadian Quality Milk Program received technical recognition from the Canadian Food Inspection Agency (CFIA) in December. Discontinuance of the marketing of farm-separated cream in Ontario effective December 8 th. Table 56 (cont d)

80 DATES OF HISTORICAL INTEREST 2004 CMSMC took steps to limit the production of solids-not-fat within the available butterfat quota. Starting with the 2003/2004 dairy year, provinces receive zero payment for any within-quota solids-not-fat produced above the allowable target production ratio of solids-not-fat to butterfat established for each province. The policy measures are designed to limit the size of the structural surplus to what can be readily marketed through low valued internal markets and within Canada WTO limits for subsidized dairy exports The Edible Oil Products Act was repealed effective January 1, Amendments to regulations under the Milk Act to prohibit filled milks and to set compositional standards and labelling requirements for dairy-edible oil spreads also came into effect on January 1, Dairy Farmers of Ontario introduced a policy to cap the solids-non fat production of individual producers at 2.35 with the ratio being administered on a cumulative dairy year basis. Ontario producers became subject to a zero payment policy for within-quota SNF production in excess of the ratio. Appeal to CITT (Canadian International Trade Tribunal) of Canada Customs and Revenue Agency s Decision to classify Milk Protein Isolate as a natural constituent of milk under tariff line by Advidia Inc. CITT finds in favour of Avidia that their product should be classified as another protein substance under tariff line providing for the duty free entry of Milk Protein Concentrates (MPC) with protein contents greater than 85 percent Effective November 2006 DFO made a number of changes in producer quota polices to curb and limit the escalation in quota prices and values. These policies included the paywhat-you bid policy for quota purchases on the exchange and a floating transfer assessment on quota sold A Promotion program for chocolate and flavoured milk and milk shakes was initiated in Ontario by DFO. Initiative was subsequently adopted at the P5 Pool and WMP Levels by other provinces. A P5 Fluid Pricing Formula was implemented effective February 1, 2007 for indexing Class 1 prices across the pool. The indexing for the formula was based on a 30 per cent weighting of the National Consumer Price Index, a 30 per cent weighting of Personal Disposal Income and a 40 per cent weighting of Producer Cash Costs (less interest) from the National COP Tariff Rate Quotas were introduced by the Federal Government for milk protein concentrates imported under tariff line as provided for by Article 28 of the GATT (WTO). No TRQs or limits were established for product originating from the U.S. New Federal Standard for Cheese Implemented December New Standards removed the ambiguities and inconsistencies in the permitted use of milk, milk products and milk components as previously defined under the Food and Drug Act and the Canada Agricultural Products Act. Effective August 1, 2008 a continuous quota was adopted at the National level. Provincial production is monitored against quota on a monthly basis within the allowable tolerances or flexibility limits established by the Canadian Milk Supply Management Committee (CMSMC) % Canadian Ice Cream Promotion Initiative was launched nationally by the Dairy Farmers of Canada featuring the Blue Cow Logo. Table 56 (cont d)

81 DATES OF HISTORICAL INTEREST 2009 P5 Harmonized quota policies were introduced on August 1 st. This included a quota price cap for the exchange and common limits on the use of over- and under-production credits by producers. A non-saleable quota base was established as well, and any future general increases or decreases will come first from the non-saleable quota established. Policies were fully implemented in Nova Scotia, Québec and Ontario with joint management of the milk supplies through an alignment of quota issuance and incentive days at the producer level and the pooling of provincial and individual producer over-quota being initiated effective December 1 st. Federal Court upheld the legality of the new cheese standards introduced in 2008 in response to a challenge from Kraft, Parmalat and Saputo. The Comprehensive Economic and Trade Agreement (CETA) was officially launched on May 6, The initial roll-out of the Canadian Quality Milk (CQM) Program started with registration of all board members, and volunteers from dairy producer committees being trained. CQM is a national, HACCP based program, and it will be mandatory for all producers to be registered by Starting June 1, 2010, the new lab testing contract began, which provided more information to producers for better farm management. A sample from every pickup is tested for composition, somatic cell count, and freezing point estimate, and one sample per week is tested for bacteria. As a result of the increased testing frequency, the bacteria penalty program was changed. New Brunswick and Prince Edward Island agreed to fully align with P5 Harmonized quota policies. They became participants in the joint management of milk supplies and the pooling of provincial and individual producer over-quota effective June 1 st for New Brunswick, and September 1 st for Prince Edward Island A National Fluid Pricing Formula for adjusting Class 1 prices was implemented by all provinces effective February 1, The national formula was modelled after the former P5 Fluid Pricing Formula (30 per cent Consumer Price Index, 30 per cent Personal Disposal Income, 40 per cent Producer Cash Costs) The Ontario Count of Justice reaffirmed that the sale, delivery, and or distribution of unpasteurized milk or milk products is prohibited. The decision was in relation to a case brought against an unlicenced Ontario dairy farmer who set up a cow share program to distribute raw milk to consumers illegally. February 8, 2011, the Board of Directors for Eastern Breeders Inc. (EBI) and Gencor unanimously approved the amalgamation of their respective companies. The newly combined company began operations under the new name EastGen, July 1, Effective August 1, 2012, the somatic cell count standard in Ontario, Regulation 761, changed from 500,000 to 400,000 cells per millilitre. Canada formally joined the Trans-Pacific Partnership (TPP) trade negotiations October 9, Canada participated in the formal negotiations for the first time at the 15 th round in Auckland, New Zealand, December 2-12, The elements of the Skim Milk Redirection program were agreed to nationally and implemented on a voluntary basis as of August 1, Under this program, butter powder plants are compensated for redirecting skim milk to yogurt manufacturers. The indexing for the National Fluid Pricing Formula was simplified and modified from 30 per cent Consumer Price Index, 30 per cent Personal Disposal Income, 40 per cent Producer Cash Costs to 50 per cent Consumer Price Index and 50 per cent of the National COP for the February 1, 2013 provincial Class 1 price adjustments. Table 56 (cont d)

82 DATES OF HISTORICAL INTEREST 2013 As of May 1, 2013, Class 2 products are reclassified as Class 2a and 2b products. Class 3a products are also reclassified into either 3a or 3c products. The reclassification is a part of the P10 Negotiating Committee agreement of September 5, There is no change in price as a result of the new classes. As of June 1, 2013, a more competitively priced milk class (3d) was created for standardized mozzarella cheese for use on fresh pizza. The purpose of this new milk class is to provide restaurants access to mozzarella cheese at a reduced price for pizza prepared and cooked onsite. Effective August 1, 2013, the P5 harmonized SNF ratio policy was implemented in Ontario, as agreed to by the P5 Boards in November The policy includes an SNF to BF ratio cap administered monthly and a butterfat premium, which is paid to any producer at or below the monthly ratio cap. The P5 Milk Allocation Model was agreed to by the P5 Supervisory Body on September 6, One aspect of this agreement is the creation of a P5 growth reserve, made up of a one percent growth allowance, which will support growth in Classes 2a and 3a. Another aspect was modifications to the Skim Milk Redirection Program which included allowing redirection to any higher class dairy products. The Allocation Model was founded and built on the recommendations of the P10 Negotiation Committee which completed its work in July An agreement, in principle, on the Comprehensive Economic and Trade Agreement between the European Union and Canada was signed on October 18, Under this agreement, TRQ access to the Canadian cheese market was increased by 17,700 tonnes to the EU The Planned Export Program for Cheese was approved by the CMSMC in January The purpose of the program is to encourage and support Canadian cheese manufacturers and exporters in developing long term export markets for Canadian cheese by providing additional milk supply to participants. The P5 Harmonized Milk Allocation Policy was approved by the P5 Supervisory Body in January The policy provides access to milk supply from the P5 Growth Reserve for processors with growth in Class 2a and Class 3a products. The P5 Quota Committee initiated a review of Quota Policies for the P5 provinces. A 5 year review was part of the P5 Harmonized Producer Quota Policy approved in Effective August 1, 2015, the revised P5 Harmonized Quota Policy changes were implemented. These changes included (1) the elimination of non-saleable quota, (2) a reduction in the quota exchange price cap from $25,000 per kg of quota to $24,000 per kg of quota, (3) all quota increases are saleable and consequently, any decreases are to saleable quota, (4) the seller of an on-going farm operation will be required to sell over the Quota Exchange 10% of the quota held at the time that the seller submits application forms for the transfer of quota in the sale of the on-going farm operation, (5) the New Entrant Quota Assistance Program for 2016 was revised to allow successful applicants to start with 24 to 32 kg of quota. Successful applicants must initially acquire a minimum of 12 kg to a maximum of 16 kg of quota. DFO will allot a quota loan to match the initial acquisition of from 12 to 16 kg. Ontario s allotment of quota for the program is 112 kg per year (6) Ontario producers may apply to establish a linked facility. Eligibility requirements for linked facilities will include a 10 km maximum distance and a maximum five year time of operation. The negotiations for the Trans-Pacific Partnership (TPP) concluded October 5, The TPP gives additional access to the dairy market for TPP member countries of an amount equivalent to approximately 3.25% of Canada s 2016 milk production. The government also announced new programs for supply-managed producers and processors to support them through the implementation of TPP and the Canada-EU Trade Agreement (CETA). Table 56 (cont d)

83 DATES OF HISTORICAL INTEREST 2016 The Ontario ingredient program was implemented April 1, 2016, which included the creation of a new competitively priced ingredient class, Class 6. The Ontario ingredient program creates an environment for dairy processors to invest in new processing of dairy ingredients, which is required for future growth in the dairy industry. The successful completion of negotiations between national dairy producer and dairy processor to evolve the Canadian dairy system was announced July 13, The national agreement in principle includes the creation of an ingredients strategy. The national strategy is expected to be implemented in early 2017 by all provinces. Table 56 (cont d)

84 METRIC CONVERSION FACTORS 1 pound = litres 1 pound = kilograms 1 litre = pounds 1 litre = quarts 1 litre = gallons 1 litre = kilograms 1 quart = litres 1 gallon = litres 1 kilogram = pounds 1 kilogram = litres 1 metric tonne = pounds 1 metric tonne = 1000 kilograms $1 per hundredweight = $ per hectolitre $1 per hectolitre = $ per hundredweight 1 acre = hectares 1 hectare = acres Table 57

85 DFOP036 Rev. 12/16 Dairy Farmers of Ontario 6780 Campobello Road Mississauga, Ontario L5N 2L8 Tel.: (905) Fax: (905)