A brief on Canada’s dairy sector.

A look at potential market growth opportunities in Canada’s dairy sector.

The Canadian Dairy Information Centre states that Canada’s dairy market currently ranks as the second strongest market within the Canadian agriculture sector.

As per recent reports from The Globe and Mail, the market is very much an ‘inelastic commodity’ which has allowed its farmers the right to produce a set amount of milk, to then sell it a fixed price. However, entering this market as a supplier has become much more difficult; the current size of Canada’s farmers market is roughly nine per cent of what it was in the 1960s, at the time that the supply management system was set in place.

An immediate action plan to offset the declining supply may include market growth through imports. Recent changes to the Canada-United States-Mexico Agreement trade agreement has given U.S. dairy farmers tariff-free access to an additional 3.6 per cent of Canada’s industry, creating an opportunity for increased trade.

Additional opportunities for market growth can be found in Canada’s organic dairy sector – an industry subset that has been steadily gaining strong consumer preference. The Canadian organic dairy sector has recently increased its market size share, as Canadian consumers slowly move towards healthier alternatives. Statistics Canada estimates that sales of organic food and beverages have grown by 20 per cent in recent years, with dairy comprising 11 per cent – or roughly $290 million – in this same time frame. The data also noted that Canadian consumers are on average willing to pay 15-20 per cent more for an organic product.

Foreign dairy producers, take note: there’s opportunity in the Canadian market.

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