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 The dairy industry has 39 registered producers and is the largest
category of agricultural products in the province. Dairy farmers
produced over 48.5 million litres of milk in 2006 valued at $37.8
million. There are 5,600 cows in the province with the average
herd size at 144. Dairy
Farmers of Newfoundland and Labrador was established
in 1983 and is responsible for managing the
production and marketing of milk in the province. Production per
cow and
the average herd size is steadily increasing while the number of registered
producers is decreasing. Newfoundland dairy farmers were in a net export position
of fluid milk in 1998 and production continues to grow.
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There is a lot of opportunity for the dairy industry in this province. The industry
is approximately 85% self-sufficient in forage relative to fluid milk production.
The production of grain, alternative forage species, cereal silage and adoption of
crop management systems can improve feed self sufficiency. There may be a limited
opportunity for milk produced from goats and sheep. In this province, fresh milk
consumption per person 65.6L, which is approximately 75% of the national average
per capita. The School Milk Program has generated
increases in consumption by school children from just under 100,000 litres to
over 1,000,000 litres annually. Continued growth is anticipated. There are also
opportunities in secondary processing of
cheese,
butter,
yogurt,
ice
cream, and
fresh cream.
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There are also challenges in this industry that must be considered:
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Net exporter of
fluid milk in 2003.
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Very high start-up costs for quota, land, cows, barns and equipment.
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Requires an in-depth knowledge of dairy management, animal husbandry,
forage production, harvesting and storage with a good handle on the
operation and maintenance of various types of equipment.
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A raw land base of a suitable size to feed your milking herd as well
as your replacements is scarce requiring new entrants to consider
purchasing an expensive established operation.
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There is no new quota issued for new entrants at this time. Though the price
of quota in Newfoundland may be lower than our mainland counter parts, it is
still prohibitive for anyone thinking about starting from scratch.
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Though our farmers are becoming more familiar with growing corn and other grains,
we still have to produce milk based upon higher feed costs due to imported grains.
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Many farms have become surrounded by spreading communities which may be reluctant to
permit farm expansion on these sites. This may hinder a new owner from increasing
in size to increase the profit margin.
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Currently over quota milk is shipped out of the Province, the cost of which is passed
to the farmer along with a possible over quota penalty. Until there is a stable
secondary processing industry requiring additional milk production, a new entrant
can not count on new sales over his present quota.
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