Milk quota frozen
No new milk quota will be issued in the 2017-2018 dairy year as production is exceeding demand, the P5 boards have concluded.
Comprised of Ontario, Québec, New Brunswick, Nova Scotia and Prince Edward Island agencies, the P5 board had approved a five per cent saleable quota increase in July of last year.
However, in its most recent decision the board reports that production is currently increasing faster than projected market growth with the P5 provinces currently being at maximum skimming capacity.
Going forward the large number of underproduction credits held by P5 producers could increase the production and market imbalance.
As a result of high production levels, as of January 31 the butter stocks were 29,385 tonnes and it is projected that the target butter stock levels of 35,000 tonnes may be exceeded by August 1, 2018. Cream requirements are currently being met and any surplus cream leads to increased butter stocks.
Taking all these factors into account, the P5 boards have decided not to extend the incentive day beyond March. The boards also agreed there will be no further quota issuance in the 20172018 dairy year.
The boards will be reviewing production in relation to market requirements in April 2018. If P5 production does not stabilize, the boards will consider further production reduction measures to bring production in line with market requirements.