Milk Producer April 2016 | Page 40

MARKETS [ DFO APPROVES INGREDIENTS PROGRAM A t its March 30 meeting, Dairy Farmers of Ontario’s (DFO) board approved the new pricing regulation, effectively implementing a new class for dairy ingredients. “Ontario’s ingredients program is expected to strengthen the industry and stimulate much needed investment,” says Ralph Dietrich, DFO chair. Dietrich further noted one of the primary objectives of the Ontario ingredients program is to competitively position the ingredients listed in Class 6 for dairy processing. “Current industry and market conditions have only reinforced the fact that new investment in ingredient capacity is an absolute necessity. This new pricing will go a long way to make that happen.” Dietrich thanked the Ontario Farm Products Marketing Commission and the Ontario Ministry of Agriculture, Food and Rural Affairs for their support and assistance with making the necessary regulatory changes. “This is an important step for the Canadian dairy industry to modernize its current infrastructure. It will position our industry to be more competitive. While Ontario has taken a leadership role, it is important to have a national ingredients program. DFO is hopeful that compromises can be found to allow all provinces to have an ingredients program in the near future,” says Peter Gould, DFO general manager. The industry is faced with unprecedented challenges, ranging from not being able to meet current and growing demand for P5 UTILIZATION BY CLASS* % Butterfat % Solids Non-Fat For January 2016 (kg of butterfat/kg of solids non-fat) 11.79% 1(a) 1(b) 2(a) 2(b) 2.10% 0.94% 6.27% 3.95% 5.10% 5.54% 3(a) 10.57% 3(b) 4 5(a) 5(b) 5(c) 5(d)/4(m) 0% 40 15.74% 12.00% 11.54% 3(c) 3(d) 26.75% 10.83% 3.13% 3.11% 3.00% 27.07% 1.19% 2.40% 2.56% 0.53% 1.43% 1.26% 1.75% 0.15% 5% 22.71% 10% 15% APRIL 2016 | MILKPRODUCER 20% 25% butterfat, disposing of skim milk every week and dryers that are at capacity and outdated, Gould says. DFO saw urgency in the situation and the need to implement a plan that would lead to changes, with one of the most important changes being investment in processing infrastructure, he added. “This is without a doubt one of the biggest changes since the inception of orderly marketing,” Gould says. Dairy Farmers of Manitoba recently announced it will adopt the Ontario program in August 2016. DFO is working with the Ontario Dairy Council and scheduling ongoing processor orientation and training meetings to review changes to milk and ingredient utilization reporting arising from the implementation of the new class. 30% 35% 40% 45 Class 1a Homo, 2%, 1%, skim, chocolate milk, flavoured milks, buttermilk Class 1b Fluid creams Class 2a Yogurt, yogurt beverages, Kefir and Lassi Class 2b Ice cream, sour cream, frozen yogurt Class 3a Fresh cheese, specialty cheese Class 3b Cheddar cheese Class 3c All types of Mozzarella except when declared in 3d Class 3d Mozzarella used strictly on fresh pizzas by establishments registered with the CDC Class 4a Butter and powders Class 4b Condensed and evaporated milk for retail sale Class 4c New products Class 4d Inventory, animal feed Class 4m Domestic surplus Class 5a Cheese for further processing Class 5b Non-cheese products for further processing Class 5c Confectionery products Class 5d Planned exports (Class 4m is grouped with 5d) WWW.MILKPRODUCER.CA