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Dairy quota purchases tied to quality

If you’re a dairy farmer in Manitoba and you want to buy more quota, you’d better have a clean record for milk quality first.

Dairy Farmers of Manitoba has implemented a new policy tying producers’ ability to buy quota on the monthly quota exchange with their milk quality history.

Dairy farms with one or more milk quality infractions within a 12-month rolling period are not allowed to buy daily quota until those infractions have been cleared from their records.

Infractions include: a somatic cell count above 399,000, a bacterial count above 120,000, too much water in the milk, antibiotic residues and failure to comply with the national CQM on-farm food safety program.

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Dairy Farmers of Manitoba vice-chairman Henry Holtmann

DFM began the first phase of the Quota Participation Program last May. The second phase became effective December 1 following approval from the Manitoba Farm Products Marketing Council.

QPP is seen as a way of slowing down growth in the size of Manitoba’s 314 dairy farms, as well as stabilizing the price of quota, which has topped $30,000 per kg of butterfat in the past. It currently stands at just under $29,000/kg.

But the program’s main purpose is to give producers an incentive to improve their milk quality instead of just staying within existing standards beyond penalty levels, said David Wiens, DFM chair.

“The focus needs to be on well-managed farms that are producing the best-quality milk,” Wiens said during a break in the DFM annual meeting in Winnipeg last week.

“We want to ensure there is continued improvement in this area, as well as with other areas.”

While QPP penalizes producers with milk quality infractions, it rewards those with good milk quality, depending on the standards they meet.

DFM has four milk quality categories: Gold, Merit, Standard and Infraction, with different criteria for each one.

Under Phase 2 of the program, dairy farms which have no infractions within a 12-month rolling period and meet Gold category criteria are allowed to purchase an unlimited amount of daily quota on the monthly exchange. Farms with no infractions meeting Merit criteria may buy a maximum of 40 kg. Farms in the Standard category (no infractions but below Gold and Merit criteria) may purchase up to 20 kg.

However, farms with one or more infractions may not buy quota until their milk quality infractions are cleared from their 12-month rolling infraction records. They are still allowed to sell quota, though.

Wiens said DFM developed QPP based on discussions with producers at the December 2012 annual meeting and the District Milk Committee Forum in February 2013.

Manitoba is the first province to implement such a program. Wiens said other provinces are looking at it with interest but have not said if they intend to follow suit.

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