DAIRY FARMERS DISCUSS SECTOR’S FUTURE AT DFC’S ANNUAL POLICY CONFERENCE

Editor’s note: Dairy Farmers of Canada (DFC) held its first virtual annual policy conference on Feb. 10 and 11, 2021. DFC filed these reports.

By Dairy Farmers of Canada CONTRIBUTOR

Around 500 dairy farmers from across Canada participated in Dairy Farmers of Canada’s (DFC) 2021 virtual annual dairy policy conference in February. The conference featured industry experts and former politicians from both sides of the border, discussing top issues and opportunities for the Canadian dairy sector.

The industry is facing several headwinds, including market access concessions in recent trade agreements, tariff rate quota challenges from the United States, rising interest in plantbased alternatives and the increased emphasis from consumers and government on sustainability, to name a few.

Pierre Lampron, DFC’s president, says the sector has a strong foundation to work from as an industry with a good track record on issues, such as animal care, sustainability and innovation, powered by the thousands of Canadians who make their livelihoods from dairy farming.

“We have a good story to tell and we need to do a better job telling it, but that is not enough,” he says. “This is not the time to retrench. For the long-term future of the sector, we need to work together and speak with a common voice. We must seize the opportunity to establish our own destiny or someone else will define it for us.”

Throughout the conference, speakers highlighted opportunities for growth in the market, viable sustainability options and the importance of innovation to fuel COVID-19 recovery. A range of experts and thought leaders also provided their advice on trade relations.

The event concluded with a strategic planning session led by Jacques Lefebvre, DFC’s chief executive officer, allowing farmers to weigh in on a several issues—from setting objectives and timelines on initiatives contributing to climate change to diversifying revenue streams. Insights from the session are key to DFC’s annual strategic planning process.

SUPPLY MANAGEMENT IS ‘WHAT WE SHOULD BE DOING,’ SAYS FORMER U.S. GOVERNOR

Howard Dean, former Governor of Vermont, Democratic presidential candidate and Democratic National Committee chair, offered his unique perspective on the Canada-U.S. trade relations. In a virtual fireside chat with Lefebvre, Dean notes the many benefits of supply management.

Hailing from a dairy state that neighbours Quebec, Dean is keenly familiar with the different approaches in dairy policy between Canada and the U.S. He endorses Canada’s supply management system and suggests the U.S. would benefit from adopting a variation of this system.

“We essentially subsidize dairy illegally, and supply management is what we should be doing,” Dean says, adding the U.S. relies too heavily on exports and favours large corporations over family-run businesses.

He says the collapse of small dairy farms in his state is an example of the U.S. system’s failures that demands considerable dairy subsidies. He also recognizes supply management’s inherent focus on sustainability and innovation, which align with U.S. President Joe Biden’s green agenda.

“If you keep doing the same thing, you are going to get the same result,” he says. “I think it’s time we try something significantly different. We have an example north of the border, which shows (supply management) works.”

Dean says his country’s overreliance on exports was a source of tension in recent trade negotiations. However, Dean is optimistic about the future of Canada-U.S. relations.

“What we really need is a relationship where we respect each other, and I think Biden will show that respect.”

MARKET OUTLOOK SHOWS MODEST GROWTH

Maxime Collette, DFC’s senior analyst of market intelligence, says despite decreases in fluid milk consumption in previous years, consumption increased last year due to the COVID-19 pandemic. However, total butterfat consumption decreased due to closures in the hotel, restaurant and institution (HRI) sector, where it is used heavily in the form of cream products.

Changes in the Canadian population also affected consumption patterns. A reduction in non-permanent residents and new immigrants, as well as an increase in total deaths, were all factors that complicated the COVID-related fluctuations in demand. Nevertheless, Canada’s supply management system insulated the sector from much of the volatility seen internationally.

Looking forward, Collette predicted modest production growth in 2021 as a result of trade deals and the lingering impacts of the COVID-19 pandemic, including slow population growth and limited activity in the HRI sector.

LIBERALS RENEW COMMITMENT TO FULL AND FAIR COMPENSATION FOR CUSMA

In a pre-recorded greeting, Prime Minister Justin Trudeau commends farmers for their dedication and resiliency throughout the COVID-19 pandemic. He also pledges his ongoing support for supply management and reiterates his government’s commitment to compensation for the Canada-U.S.-Mexico Agreement (CUSMA).

Minister of Agriculture and Agri-Food Marie-Claude Bibeau and Minister of Innovation, Science and Industry François-Philippe Champagne share the government’s dairy policy, including:

• Efforts to support the industry through the pandemic;

• Plan to invest $350 million to help Canadian farmers build on their strong environmental sustainability legacy;

• Commitment to compensate dairy farmers for the effects of CUSMA.

“We will come back to farmers to complete compensation related to (CUSMA). This is a priority for myself and our government,” Bibeau says. “Our government has now made an undertaking to protect supply management, as well as not give away any market share in future negotiations.”

OPPOSITION REACTIONS

Conservative leader Erin O’Toole expresses frustration over the Liberal government’s treatment of farming families, noting it supported COVID-19 relief packages but held back on compensation for concessions made during recent trade agreements.

“I think you’ve made enough concessions,” O’Toole says. “Dairy producers are not just a bargaining chip—they are fundamental parts of the agricultural sector in Canada and our economy.”

NDP leader Jagmeet Singh and O’Toole say the pandemic has been difficult for dairy farmers and commend their work in the face of adversity. They also remind delegates their parties backed measures to support the industry.

“If we don’t have a vibrant, strong sector for agriculture that supports dairy farmers, all of us will be worse off,” Singh says.

Bloc Québecois leader Yves-François Blanchet acknowledges the pandemic-related difficulties and offers dairy farmers the unfailing support of the Bloc Québécois.

FORMER PRIME MINISTER Stephen Harper participated in a fireside chat at Dairy Farmers of Canada’s policy conference.

FIRESIDE CHAT WITH STEPHEN HARPER

Former prime minister Stephen Harper talks about a variety of issues—from geopolitics, to trade and dairy, including his government’s position during the negotiation of the Canada-European Union Comprehensive Economic and Trade Agreement (CETA) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), one that originally included the U.S. He notes at the time, the government felt the only other major trade agreements left were with China and India, and neither were threats to Canadian dairy.

At the time, he says the government acknowledged that above the access granted under the World Trade Organization, supply management would be vulnerable if access reached more than eight per cent, and could not sustain if access reached 10 per cent.

Regarding the new U.S. administration, Harper says dairy farmers should not expect a significant strategy shift toward the Canadian dairy industry—at best, exchanges will be more collegial.

DFC SHARES UPCOMING MARKETING INITIATIVES

Pamela Nalewajek, DFC’s vice-president of marketing, provided an update on its marketing strategy, including recent campaigns and future initiatives. DFC’s audience research helped the organization better understand various consumer segments and armed it with valuable insights.

This work revealed the importance of ensuring the sector’s values align with its consumers’, reinforcing the need to speak to millennial and Generation Z audiences in authentic ways.

She describes recent pandemic-related consumption trends, including the growing interest in Canadian-sourced products and the shift toward cooking more at home. She also notes the pandemic impacted perceptions of the notion of well-being. These are all insights DFC is leveraging in its campaigns.

Providing a preview of future marketing endeavours, she says DFC will continue to discuss myths and misconceptions in its advertising, especially in areas of sustainability and animal care.

The Blue Cow logo is an essential tool in that regard. Now featured on almost 8,300 products from more than 500 brands, the logo is increasingly recognized among consumers as a symbol of trust in Canadian dairy farmers. DFC will continue to leverage the logo in its advertising and through innovative partnerships with leading Canadian processors, retailers and restaurant chains.

LACTALIS BRINGS BLUE COW LOGO TO ASTRO AND STONYFIELD YOGURTS

Nalewajek announced Lactalis Canada will begin featuring the Blue Cow logo on Astro and Stonyfield yogurt products later this year. As one of the nation’s leading dairy processors, Lactalis first adopted the Blue Cow logo in 2018 and has since committed to rolling it out on hundreds of milk, cream and cheese products. DFC is incredibly excited at the Blue Cow logo program’s growth and will continue to form partnerships in the coming year.

TIM HORTONS EXECUTIVE EMPHASIZES IMPORTANCE OF CO-OPERATION, OPENNESS TO CHANGE

In a keynote presentation, Duncan Fulton, chief corporate officer of Restaurant Brands International, the parent company of Tim Hortons, offers lessons from the company’s pandemic response and progress on the brand’s growth since its acquisition by RBI in 2014.

He encourages stakeholders to “embrace change before you have to,” citing Tim Hortons’ efforts to match evolving consumer demands and government regulation. Highlighting Tim Hortons’ new mobile app, its move toward more sustainable packaging and improved transparency in ingredients, he says these are examples of how Tim Hortons is adapting to changing demands.

“A big part of brand resiliency is always trying to push the brand to be on the edge of what’s next, with a careful balance of what works,” Fulton says. “It’s important we make the right decisions today that will make sense one to five years from now— not necessarily two months from now.”

For Tim Hortons, this means investing in ingredients with a higher ethical perception, reusable packaging and improved product quality, even as sales plummeted during the pandemic.

DUNCAN FULTON, right, is the chief corporate officer of Restaurant Brands International.

Fulton emphasizes the importance of co-operation while solving industry-wide challenges. “There’s no point in having us all figure out the same problem three different ways. Let’s get at it together.”

PANEL DISCUSSES AFFORDABILITY, BENEFITS OF GREEN ENERGY

Sustainability has been a key area of focus for DFC and the dairy industry, says Annie AcMoody, DFC’s senior director of policy, trade and sustainability, who led a panel discussion on sustainability and innovation at the farm level.

In September 2021, proAction’s new environment module will be fully implemented. However, feedback from farmers reveals a willingness to go further, provided it is economically viable.

“It has to be practical and cost-effective, and it also has to show a redemption of the environmental impact of the dairy industry,” AcMoody says. “Easing society’s problem with eco-anxiety shouldn’t come at the expense of our viability.”

The panel included Jennifer Green, executive director of the Canadian Biogas Association, and Henry Oosterhoff, a Canadian dairy farmer who installed solar panels on his dairy farm more than 10 years ago.

The two shared their expertise on sustainable energy options and the practicality of implementing them at the farm level. Green says while the adoption of biogas requires the implementation of new maintenance processes and operating procedures, there are many benefits from the environmental and business perspectives. Some of the benefits include reduced input costs and added revenue to farm operations, mitigation of risks due to market shifts and security for the next generation.

ADOPTING BOLD MEASURE ON SUSTAINABILITY

Lefebvre closed the conference by leading a strategic planning session where dairy farmers were invited to offer their input on a variety of issues. Overall, dairy farmers recognize the need and express an openness toward taking bolder steps to improve the industry’s environmental sustainability and communicating these objectives with the public.

When asked about what concrete goals the industry should set on sustainability, 69 per cent of farmers say the Canadian industry should set sustainability targets that meet or surpass those set by Dairy Farmers of America and the Innovation Center for U.S. Dairy, which aim to cut greenhouse gas emissions by 30 per cent by 2030 and render the industry carbon neutral by 2050.

Dairy farmers also discussed efforts to reduce or offset greenhouse gasses to meet this target. About 73 per cent of farmers polled say it would be feasible for their farm to plant eight or more trees per year to absorb emissions, and 93 per cent say they would be very or somewhat likely to participate in a government program to adopt or build alternative sources of energy on their farm to reduce emissions.

Dairy farmers also recognize the need to support innovation, with more than 78 per cent indicating they would invest in research and development to support the greater use of milk and milk products in food that offered returns or dividends on investments.

The session is an important part of DFC’s annual strategic planning process since it gives dairy farmers an opportunity to provide feedback directly to the organization and their peers. As such, DFC will incorporate the insights gleaned from the session into its future planning.

LEADERS DISCUSS SUSTAINABILITY INITIATIVES

Following DFC’s policy conference, Lampron, Lefebvre and David Wiens, DFC’s vice-president, met with Trudeau and Bibeau to discuss the government’s emerging clean tech agenda and how dairy farmers can participate in these efforts with the support of federal funding programs.

Lampron says the industry is committed to taking action on sustainability issues and suggests a collaborative approach to implementing new measures, rather than a regulatory approach.

The dairy sector has a strong legacy of implementing practices to improve sustainability and has adopted a culture of continuous progress on environmental issues.

DFC’s leaders will continue to work with the government to find ways to leverage federal funding to support sustainability initiatives for dairy producers.