A partnership among Canadian dairy service provider organizations should help position Canadian producers to take advantage of rapidly changing technology and make the sector more efficient, the groups say.
Why does it matter? The number of Canadian dairy farmers continues to drop and the need for more efficient services is growing as the price of milk declines. Technology is also challenging historical business models in dairy services, but also providing new opportunities.
The three partners include CanWest DHI; Valacta, its dairy herd management services counterpart in Quebec and the Maritimes; and the Canadian Dairy Network (CDN), which provides genetic evaluation for Canadian dairy cattle. Together they employ 500 people across the country.
CanWest DHI delegates will meet Jan. 20 in Alliston, Ont. to approve bylaw changes needed to create the new partnership.
At CanWest DHI’s final annual meeting recently in Toronto representatives of all three farmer-run organizations talked about the benefits of the partnership.
There’s little but semantics in calling the coming together of the organizations as a partnership instead of a merger, but each organization continues to have external funding from government and legacy funds that requires that each of them to continue to have their own organizations exist. But there will be one board of directors, name and staff for the new organization.
Ontario dairy farmer Harold Kress, a CanWest DHI board member, outlined the details of the deal at the meeting.
Several pressures led to the creation of the new partnership, he said, including:
- Consolidation in the industry, including fewer and larger dairy farms.
- The next generation on the farm is reconsidering traditional services. Technology allows for the collecting of copious data on the farm that used to be collected by herd management services organizations, like Valacta and CanWest DHI. However, those organizations have expanded into other services for farmers.
- Genetic evaluation is coming from artificial insemination and other companies due to the increased availability of genomic testing.
- Industry organizations are supported by fewer farms. “For every partnership involved in the dairy industry, the funds come out of the bulk tank.”
Kress and other speakers said there are numerous benefits to the partnership, including:
- Risk management
- Product and service innovation through the sharing of data and expertise. Neil Petreny, general manager of CanWest DHI, pointed to artificial intelligence and machine learning, sensor technology and growing international partnerships as areas where the organization could grow in the future.
- The Valacta Centre of Expertise, set up to research and deliver productivity and profitability information for farmers, in a partnership of Valacta, the Quebec government and McGill University, which will be made into a national centre
- Operational efficiency
- Talent attraction
The organization will have nine directors, two from Ontario, one from Western Canada, three from Quebec, one from Semex, one from Holstein Canada and one from Dairy Farmers of Canada. All of those board members have to be farmers, although two external directors can be added who are non-farmers.
The partnership will actually be among four entities, as within CanWest DHI still exists the separate Ontario and western DHI organizations, Valacta and CDN.
The organizations already work together. For example, CanWest DHI and Valacta have shared software for almost 20 years.
“It’s a pleasure to be part of a group of people with a tremendous clear vision of where we need to go,” says Norm MacNaughton, president of CDN.
Valacta president and Quebec dairy farmer Pierre Lampron, who is also the president of Dairy Farmers of Canada, said he kept his job as the president of Valacta to see the partnership through.
“I’ve been very enthusiastic about the partnership developing over last year.”
The partnership is expected to be in operation in October.
— John Greig is a field editor for Glacier FarmMedia based at Ailsa Craig, Ont. Follow him at @jgreig on Twitter.