Manitoba dairy producers will no longer have to ship milk across provincial borders, thanks to an increased processing capacity at home.
The $100-million MDI dairy-processing plant is up and running in Winnipeg’s South End, increasing Manitoba’s dairy-processing capacity by about 40 per cent. The 80,000-square-foot retrofitted egg-processing facility will now process 180 million litres of milk each year.
“It’s definitely going to improve things in Manitoba,” said David Wiens, Dairy Farmers of Manitoba chair. “We’ve been able to issue more quota in Manitoba now and increase our production.”
Over the last year and a bit, Wiens said dairy production in Manitoba has increased by 12 per cent in anticipation of the MDI plant opening. However, dealing with increased milk production in the lead-up to the plant’s opening was a challenge.
“We’ve been moving milk to Quebec or to Saskatoon, just trying to find a home for all of the milk,” Wiens said. “So yes, it was a challenge but we wanted to ramp up production in the province before the plant opened. And we were glad to have co-operation from other provinces in order to receive the milk.”
As soon as the facility began accepting milk on October 5, milk shipments into Saskatchewan came to a halt. Once the plant is at top speed, milk currently being cascaded into Quebec will also be redirected to the Winnipeg facility, Wiens said.
“So in fact, what we’ll see now is more milk in Manitoba flowing towards this plant and eventually there may be milk from parts of Saskatchewan ending up in Brandon at the dairy plant there, because of the way we cascade milk,” he said. “In the past we have also had to skim some of the components of the milk and we simply weren’t able to find a home for that, now all of that can be directed towards the plant.”
Being able to process all of the province’s milk at home will also help lower transportation costs for producers.
Owned and operated by Vitalus Nutrition and Gay Lea Foods, the Manitoba Dairy Ingredients (MDI) Holdings Corporation will produce a full range of high-value milk proteins, including MPC 85, MPI 90 and buttermilk powders, as well as butter.
Steve Dolson, an Ontario dairy farmer and chair of Gay Lea Foods Co-operative board of directors, described the plant as a “unique collaboration” defying geography at the official plant opening last week.
“What this plant really represents is how our industry can come together, can work together to creatively address shared concerns, capitalize on opportunities and jointly position ourselves and our industry for future growth,” he said. “This plant is many things to many people.”
The expansion of Gay Lea into Manitoba, also gives Manitoba dairy farmers the opportunity to join the Ontario-based co-operative, which expanded even farther west in recent weeks with the purchase of Alberta Cheese Company.
“The new processing facility also enables Gay Lea Foods, as Canada’s leading butter producer, to better service our valued retail and food-service customers, growing the Canadian food manufacturing sector across Canada,” added Gay Lea president and CEO, Michael Barrett.
Ralph Eichler, Manitoba’s minister of agriculture, was also on hand for the official opening, noting that increased processing capacity in the province will support the sustainability of the dairy industry and draw in new entrants.
“What makes this day so exciting for Manitoba? Companies see Manitoba as a desirable place to make dairy-processing investments in new innovative processing, utilizing a growing protein demand,” said Eichler.
Further expansion of Manitoba’s dairy-processing capacity is expected in the coming months and years, as existing plants ramp up production and small processors enter the market. But nothing on the scale of the MDI plant, Wiens said.
“We are still having to catch up,” he said, noting Manitoba was eight per cent under quota issue at one time. “We are working, not only as a province but as a western milk pool to ensure that this happens, and of course Manitoba isn’t the only province, there is further development happening in other provinces too.”
Like all dairy farmers, Manitoba’s producers are also working to fill a rapidly expanding demand for butterfat. Once considered unhealthy, natural fats have re-entered the Canadian diet, driving demand for high-fat cheese, cream, butter, yogurt and ice cream.
Currently, limited volumes of cream and butter are being imported under special permit from the U.S. and New Zealand to meet demand, Wiens said.
“Our commitment is to always supply the Canadian market with dairy products,” he said. “(Imports) are a very temporary thing, because as our processing is increased and also renewed, that’s going to have an impact on our ability to always supply the Canadian market.”
The Western Milk Pool has also agreed to eliminate the solids-not-fat to butter fat ratio requirement by August 1 of next year to encourage greater butterfat production.
“Instead of trying to create this ratio… we’re simply saying, here are the values and it will send the signal that, you know what? We want a high butterfat and we can do it with less milk and still have the same revenue,” said Wiens. “It’s easy to understand, and it’s really a kind of direct response to what the demands are in the marketplace.”