A newly announced milk-processing plant is expected to allow Manitoba dairy farmers to increase production and make use of their entire quota allotment.
Last week, Vitalus Nutrition and Gay Lea Foods announced they would partner in the refurbishment of an egg-processing facility in Winnipeg’s Fort Garry Industrial Park. The plant is already equipped with an egg dryer that will be retrofitted for milk, resulting in greater production of both non-fat ingredients and buttermilk.
“Certainly we would intend to have the plant operational by September at the latest, perhaps a little earlier,” said Gay Lea’s president and CEO, Michael Barrett. “It will be the newest and best investment in processing the province of Manitoba has seen in a long time and it will help the Dairy Farmers of Manitoba be able to keep that milk in the province.”
For some time now, a shortage of local processing facilities has resulted in milk from Manitoba being cascaded towards other provinces, where extra processing capacity is available. This plant is expected to end underproduction in the province.
“Our commitment is to provide milk to this venture, which will also allow us to put in our full allocation of milk for our producers — right now we are underissued by about six per cent,” said Dairy Farmers of Manitoba chair David Wiens. “By next summer we hope to have at least six per cent more production and probably more than that with the ongoing demand for various dairy products, like butter, yogurt and cheese.”
He added Manitoba’s relatively small size can make attracting large investments a challenge, but that a newly created ingredient strategy has played a role in the pending expansion of processing facilities.
“Part of the problem in the past has been that although the butterfat market has been strong in Canada, the protein side has been very limited, so with the ingredient strategy… we’ve created this competitively priced ingredient class that opens up possibilities,” said Wiens. “I don’t expect that this project would have gone ahead if there had been no agreement or any will to push forward on an ingredient strategy, so all of these things are critical factors in the plant being built here.”
A shift in consumer tastes has also helped drive demand for butterfat, said Barrett.
“If we look back maybe six, seven or eight years ago there was a lot of hype in regards to dairy and fat not being a good thing, so certainly what we have seen is a very dramatic shift in the preference of Canadians,” he said, adding current medical research also shows fat is healthy in moderation.
Barrett noted that a push for simpler products, with fewer ingredients, has driven consumers back to products like butter and cheese, as well.
“There really isn’t a much simpler ingredient deck than what is in butter, it’s milk and it’s salt and there is not anything much simpler than that. So if people are looking for more wholesome products that’s an important thing for us,” he said.
A resurgence of a food culture focused on fun and enjoyment has also promoted increased use of butter, cream and other basic ingredients.
“Today there are a number of very well-known baking shows and foodie shows, and they are not cooking with margarine, they are cooking with butter, so we have seen this kind of retrospective and return to a simpler diet, where people want to have something natural and something that is good and that tastes good,” Barrett said. “We’re not talking about doing shortbread or things like that with margarine, we’re going back to Grandma’s grandmother’s recipes, doing things with butter.”
While the processing plant, which is expected to create as many as 80 new jobs, won’t be open for several months, Dairy Farmers of Manitoba is already beginning to accelerate milk production.
“Obviously it takes awhile to ramp up the production, six per cent is a long way to go because dairy farms would have to get their cows, purchase more livestock and in some cases expand facilities,” said Wiens. “So we are sending those signals out now.”
He said there was one quota roll forward in September and that a second roll forward of two per cent will occur on November 1.
“To simply put it all forward now wouldn’t actually bring more production forward, that’s why we’re phasing it in over the next number of months,” said Wiens. “In the meantime we are hauling milk into Quebec. We know that there are going to be times this winter where we are going to be challenged to find a home for the milk… but we don’t want to simply wait to start ramping up production until the facility opens, we are anticipating it and we want to put ourselves in a good position to have that milk in place.”
Dairy farmers in the province have reacted positively to the news, said Wiens.
“There has been a lot of frustration on the part of all of us, as dairy farmers, because of this lack of processing capacity and being unable to find a guaranteed place to send the milk on an ongoing basis, so they know very well that we have been underproducing relative to the rest of the country, so when this was announced they were very, very pleased to hear it,” he said.
Manitoba dairy producers will also have the opportunity to join the Ontario-based Gay Lea Foods Co-operative, which represents about 4,000 farmers on more than 1,300 farms.
“We think this is very exciting in the sense that we know there is a rich history of co-operatives in Western Canada. I used to be a history teacher so I’m quite well aware of the impact that the co-ops have made… and we think that this is a phenomenal opportunity to be able to ensure the dairy industry is something by farmers and for farmers,” said Barrett. “So we are quite excited and looking forward to Manitoba members… the business piece of this is exciting, the jobs are excited, but to be able to have farmers in control of their own destiny, we think that is life changing.”
While Vitalus Nutrition could not be reached for comment by press time, the company’s president Philip Vanderpol did issue a statement that said, “Vitalus is pleased to partner with Gay Lea Foods and Dairy Farmers of Manitoba to increase much-needed drying capacity while further developing the dairy ingredients industry, adding growth and new market opportunities for Canadian dairy.”