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Dairy Farm Numbers Shrinking

The number of dairy farmers in Manitoba continues to fall rapidly.

The province currently has 354 registered milk producers, seven per cent fewer than in 2009-10, according to Dairy Farmers of Manitoba.

The rate of loss is steeper than in the two previous years. The number of producers declined by four per cent in 2008-09 and two per cent in 2007-08.

On average, two to three producers sell their quota and leave the industry every month.

Manitoba today has 16 per cent fewer milk producers than the 423 it had at the beginning of the 2007-08 dairy year.

The figures were released during DFM’s annual round of fall district meetings which wrapped up Oct. 15.

Normally, the departure of so many farmers from a particular agricultural sector in such a short time would suggest something is wrong.

That’s certainly true for Manitoba’s financially ravaged hog sector, which today has roughly half the number of producers it had in 2003.

But there’s nothing wrong with the dairy sector, according to David Wiens, DFM chairman.

“The industry is strong,” he said during the last of six regional meetings held earlier this month.

Wiens suggested several reasons for the number of producer departures in the past year.

Some smaller producers may have decided to close because an incoming provincial manure management regulation will ban the spreading of livestock manure on fields during winter months. The rule takes effect in 2013.

Producers with fewer than 50 cows may feel that constructing overwinter manure storages is not worth the expense, Wiens said.

Farmers who need to renovate older dairy barns and facilities may be unwilling to make the hefty investment and decide to get out instead, he said.

As well, some farm families may not have a younger generation willing to take over the operation and assume the high transfer costs of doing so, Wiens added.

All of the above reasons apply to smaller farms more often than larger ones. As a result, dairy operations are becoming fewer and bigger as small producers sell out, said Wiens.

But that’s not always the case. In fact, Manitoba has “many healthy, vibrant” small dairy farms, he said.

The average dairy farm in the province holds 91.36 kg of daily quota. One kg is roughly equal to one cow.

But 70 per cent of farms are below that figure and only 30 per cent are above it, according to DFM.

The majority of transactions on DFM’s monthly quota exchange consist of larger producers buying up the quota of smaller ones.

But not everyone is leaving the business, Wiens was quick to add.

DFM has a program to attract new people to the industry. New entrants are loaned 15 kg of quota for five years, provided they buy at least another 15 kg at the outset. They are expected to purchase even more quota as time goes on. After five years, DFM gradually takes back the loaned quota as the new entrants become established.

Currently nine producers are enrolled in the program.

The quota exchange also handles whole-farm transfers in which one producer buys out another. That used to happen four or five years ago with dairy farmers relocating to Manitoba from Europe and other provinces, said Brent Achtemichuk, DFM general manager.

But whole-farm transfers have largely dried up since then. DFM saw only two this past year, Achtemichuk said. [email protected]

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“The industry is strong.”

– DAVID WI ENS, DFM

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