On Feb. 10 and 11, some 500 dairy farmers from across Canada participated in a virtual edition of Dairy Farmers of Canada’s (DFC) 2021 Annual Dairy Policy Conference (APC). The conference featured industry experts and former politicians from both sides of the border discussing top issues and opportunities for the Canadian dairy sector.

Here, DFC has assembled a few of the highlights of the event for those who were unable to participate.

2021 market outlook shows modest growth despite ongoing challenges

Maxime Collette, DFC’s senior analyst, market intelligence, helped situate Canadian dairy within the global dairy market and offered a market outlook on the coming year. He noted that despite decreases in previous years, consumption of fluid milk increased last year due to the COVID-19 pandemic. However, total butterfat consumption decreased due to closures in the hotels, restaurants and institutions (HRI) sector, where it is used heavily in the form of cream products.

Changes in the Canadian population also affected consumption patterns. A reduction in non-permanent residents and new immigrants, as well as an increase in total deaths, were all factors that further complicated the COVID-19-related fluctuations in demand. Nevertheless, Canada’s supply management system insulated our sector from much of the volatility seen internationally.

Looking forward, Collette predicted modest production growth in 2021 as a result of trade deals and the lingering impacts of the COVID-19 pandemic (including slow population growth and limited activity in the HRI sector).

Supply management is ‘what we should be doing,’ says Democrats’ Howard Dean

Former Governor of Vermont, Democratic presidential candidate and Democratic National Committee Chairman Howard Dean offered his unique perspective on Canada-U.S. trade relations. In a virtual fireside chat with DFC CEO Jacques Lefebvre, he noted the many benefits of supply management.

Hailing from a dairy state that neighbours Quebec, Dean is keenly familiar with the vastly different approaches in dairy policy between Canada and the U.S. He endorsed Canada’s supply management system and suggested that the U.S. would benefit from adopting a variation of this system south of the border.

Former Governor of Vermont and Democratic National Committee Chairman Howard Dean participated in a virtual fireside chat with DFC CEO Jacques Lefebvre, where he noted the many benefits of supply management. Photo courtesy of DFC.

 

“I am for supply management in dairy,” Dean said. “We essentially subsidize dairy illegally, and supply management is essentially what we should be doing.”

Dean noted that the U.S. relies too heavily on exports and favours large corporations over family-run businesses. He cited the collapse of small dairy farms in his state as an example of the failures of a system that demands considerable dairy subsidies. He also recognized supply management’s inherent focus on sustainability and innovation, which would align with President Biden’s green agenda.

“If you keep doing the same thing, you are going to get the same result,” he observed. “I think it’s time we try something significantly different, and in this case, we have an example right north of the border which shows that it works.”

Dean noted that his country’s over-reliance on exports was a key source of the tension in recent trade negotiations. However, Dean was optimistic about the future of Canada-U.S. relations.

“What we really need is a relationship where we respect each other, and I think President Biden will show that respect,” Dean said.

Liberals renew commitment to full and fair compensation for CUSMA

Following a pre-recorded greeting from Prime Minister Justin Trudeau, Marie-Claude Bibeau, the minister of agriculture and agri-food; and François-Philippe Champagne, the minister of innovation, science and industry, discussed their government’s dairy policy.

Trudeau commended farmers for their dedication and resiliency throughout the COVID-19 pandemic. He also pledged his ongoing support for supply management and reiterated his government’s commitment to compensation for the Canada-U.S.-Mexico Agreement (CUSMA).

Minister Champagne praised dairy farmers for adopting innovative approaches and new technologies.

Bibeau reviewed the government’s efforts to support the industry through the pandemic. She noted the progress made under DFC’s proAction program, including the industry’s partnership with Lactanet Canada on traceability and the forthcoming launch of the environment module. On innovation, she discussed the government’s plan to invest $350 million to help Canadian farmers build on their strong environmental sustainability legacy.

On trade agreements, Minister Bibeau assured dairy farmers that while the government was currently focused on other affected supply-managed sectors, it remained committed to compensating dairy farmers for the effects of CUSMA.

“We will come back to farmers to complete the compensation related to the new agreement with the U.S. and Mexico, and this is a great priority for myself and our government,” Minister Bibeau said. “I want to repeat that our government has now made an undertaking not only to protect the supply management system but also not to give away any market share in future negotiations.”

Opposition reactions

Conservative leader Erin O’Toole, NDP leader Jagmeet Singh and Bloc Québecois leader Yves-François Blanchet all shared pre-recorded messages voicing support for Canada’s dairy industry.

O’Toole expressed frustration over the Liberal government’s treatment of farming families, noting that it supported COVID-19 relief packages but held back on compensation for concessions made under recent trade agreements.

“I think you’ve made enough concessions,” O’Toole said. “Our dairy producers, they’re not just a bargaining chip, they are fundamental parts of the agricultural sector in Canada and also part of our economy.”

Singh and O’Toole both mentioned how the pandemic has been difficult for dairy farmers, but commended their work in the face of adversity. They also reminded delegates of the efforts their parties had taken by backing measures to support the industry.

“If we don’t have a vibrant, strong sector for agriculture, if we don’t have a strong sector that supports dairy farmers, all of us will be worse off,” Singh said.

Blanchet, meanwhile, acknowledged the pandemic-related difficulties and offered the unfailing support of the Bloc Québécois.

Former P.M. Stephen Harper participates in a virtual fireside chat

Former Prime Minister Stephen Harper joined DFC’s CEO Jacques Lefebvre to discuss a variety of issues from geopolitics to trade and dairy. The R.H. Harper shared the mindset of his government at the time of negotiating the Canada-European Union Comprehensive Economic and Trade Agreement (CETA) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), one that originally included the U.S. He noted that, at the time, the government felt the only other major trade agreements left were with China and India, and neither were threats to Canada’s dairy.

Former Prime Minister Stephen Harper joined DFC’s CEO Jacques Lefebvre to discuss a variety of issues from geopolitics to trade and dairy. Photo courtesy of DFC.

 

Furthermore, he noted that the assessment of the government at the time was that, above the WTO access, the supply management system would be vulnerable if access went above 8% and could not sustain itself if the additional access reached 10%.

As per the new U.S. administration, the former Prime Minister indicated that dairy farmers should not expect a significant strategy shift towards the Canadian dairy industry – at best the exchanges will be more collegial.

DFC previews upcoming marketing initiatives

Pamela Nalewajek, DFC’s vice-president, marketing, provided an update on its marketing strategy, including recent campaigns and future initiatives. DFC’s audience research helped the organization better understand the various consumer segments and armed it with valuable insights. This work revealed the increasing influence of values in purchasing decisions, pointing to the importance of ensuring our sector’s values align with our consumers’ values. It also reinforced why we need to speak to millennials and Gen Z’s in authentic ways.

She described some recent pandemic-related consumption trends, including the growing interest in locally and Canadian-sourced products and the shift towards cooking more at home. She also noted that the pandemic impacted perceptions of the notion of well-being. These are all insights that DFC is leveraging in its campaigns.

Nalewajek also provided a sneak peek at future marketing endeavours. DFC will continue to break down myths and misconceptions in its advertising, especially in areas like sustainability and animal care.

The Blue Cow logo is an essential tool in that regard. Now featured on almost 8,300 products from more than 500 different brands, the logo is increasingly recognized among consumers as a symbol of trust in Canadian dairy farmers. DFC will continue to leverage the logo in its advertising and through innovative partnerships with leading Canadian processors, retailers and restaurant chains.

Lactalis bringing Blue Cow logo to Astro and Stonyfield yogurts

Nalewajek announced that Lactalis Canada would begin featuring the iconic Blue Cow logo on yogurt products marketed under the Astro and Stonyfield brands later this year. As one of the nation’s leading dairy processors, Lactalis Canada first began adopting the Blue Cow logo in 2018 and has since committed to rolling it out on hundreds of milk, cream and cheese products. DFC is incredibly excited at the Blue Cow logo program’s growth and will lean further on such partnerships in the coming year.

Tim Hortons’ executive emphasizes importance of cooperation, openness to change

In a keynote presentation, Duncan Fulton, chief corporate officer of Restaurant Brands International (RBI – the parent company of Tim Hortons) offered lessons from his company’s pandemic response and progress on the brand’s growth since its acquisition by RBI in 2014.

He encouraged stakeholders to “embrace change before you have to,” citing Tim Hortons’ efforts to match evolving consumer demands and government regulation. He highlighted their new mobile app, their move towards more sustainable packaging and improved transparency in ingredients as examples of how Tim Hortons is adapting to changing demands.

 In a keynote presentation, Duncan Fulton, chief corporate officer of Restaurant Brands International (RBI – the parent company of Tim Hortons), offered lessons from his company’s pandemic response and progress on the brand’s growth. Photo courtesy of DFC.

 

“I think a big part of brand resiliency is always trying to push the brand to be on the edge of what’s next, with a careful balance of what works,” Fulton said. “It’s the same conversation, no matter what the year is, which is: All that matters is what the consumer wants.”

Fulton also encouraged delegates to “take a long-term view to ownership,” a perspective he noted many farmers inherently hold.

“I know for many of you as dairy farmers and dairy industry, this is your life – in many cases, second- or third-generation lives,” said Fulton. “It’s important that we make the right decisions today that will make sense, one to five years from now, and will not necessarily make sense two months from now.”

For Tim Hortons, this has meant investing in ingredients with a higher ethical perception, reusable packaging, and improved product quality, even as sales plummeted during the pandemic.

Fulton pointed to the importance of cooperation while solving industry-wide challenges. “There’s no point in having us all figure out the same problem three different ways. Let’s get at it together,” he said.

Panel discusses affordability, benefits of green energy

Annie AcMoody, DFC’s senior director, policy, trade and sustainability, led a discussion on sustainability and innovation at the farm level.

Sustainability has been a key area focus for DFC and the dairy industry – in September 2021, the new environment module of proAction will be fully implemented. However, feedback from farmers reveals a willingness to go even further, provided that it is economically viable.

“It has to be practical and cost-effective, and it also has to show a redemption of the environmental impact of the dairy industry,” AcMoody said. “Easing society’s problem with eco-anxiety shouldn’t come at the expense of our viability.”

Joining AcMoody was Jennifer Green, executive director, Canadian Biogas Association; and Henry Oosterhoff, a Canadian dairy farmer who installed solar panels on his dairy farm more than 10 years ago. The two shared their expertise on sustainable energy options and the practicality of implementing them at the farm level. Green highlighted that while the adoption of biogas requires the implementation of new maintenance processes and operating procedures, there are many benefits from environmental and business perspectives. Some of the benefits she cited include reduced input costs and added revenue to farm operations, mitigation of risks due to market shifts and security for the next generation.

DFC leadership discusses government support for sustainability initiatives with Prime Minister Trudeau and Minister Bibeau

Following the APC, Dairy Farmers of Canada’s President Pierre Lampron, Vice-President David Wiens and CEO Jacques Lefebvre met with Prime Minister Justin Trudeau and Minister of Agriculture and Agri-Food Marie-Claude Bibeau to discuss the government’s emerging clean tech agenda and how dairy farmers can participate in these efforts with the support of federal funding programs.

After hearing from industry experts speak to the APC on the importance of embracing change, the large majority of dairy farmers expressed interest in taking bolder steps towards protecting the environment. Lampron conveyed this commitment to move forward on issues of sustainability during the meeting and suggested a collaborative approach to implementing new measures rather than a regulatory approach.

The dairy sector already has a strong legacy of implementing practices to improve sustainability and has adopted a culture of continuous progress on environmental issues.

The meeting was well received and DFC leadership will continue to work with the government to find ways to leverage federal funding to support sustainability initiatives of interest to dairy producers.

Dairy farmers express desire to adopt bold measures on sustainability

The conference closed with a strategic planning session led by DFC CEO Jacques Lefebvre, where dairy farmers were invited to offer their input on a variety of issues. Dairy farmers recognized the need and expressed an openness towards taking bolder steps to improve the industry’s environmental sustainability and communicating these objectives with the public.

When asked about what concrete goals the industry should set on sustainability, 69% of farmers felt that the Canadian industry should set sustainability timeline targets that meet or surpass those set by Dairy Farmers of America and the Innovation Center for U.S. Dairy, which aim to cut greenhouse gas emissions by 30% by 2030 and render the industry carbon-neutral by 2050.

Efforts to reduce or offset greenhouse gases to meet this kind of target were also discussed. A total of 73% of farmers polled said that it would be feasible for their farm to plant eight or more trees per year to absorb emissions, and 93% said they would be very or somewhat likely to participate in a government program to adopt or build alternative sources of energy on their farm to reduce emissions.

Dairy farmers also recognized the need to support innovation. When asked about their level of interest in investing in a research and development fund that would support greater use of milk and milk products in food and offered returns or dividends on investments, over 78% expressed support for such a fund.

The session is an important part of DFC’s annual strategic planning process, as it gives dairy farmers an opportunity to provide feedback directly to the organization and their peers. As such, DFC will incorporate the insights gleaned from the session into its future planning.