INTRODUCTION
Based on net farm cash receipts, the Canadian Dairy industry is the second largest industry, after red meat in the agriculture sector. Québec is the leading province in the Agriculture sector and the Dairy industry in Canada. The dairy industry of Québec accounts for 83,000 direct and indirect jobs i.e., 1.5% of the working force. From the past two decades, the number of farms has declined by 40% whereas, the production per farm has increased by 25%. The number of cows has also decreased by 15% whereas, the production per cow has increased by 28%, which shows an increase in the efficiency. Québec produces over 38% of all milk that is produced in Canada and exports about 40% of its production to the rest of Canada and other countries. Since 1986, the number of dairy farms has declined by 40%, while those still in business have increased their output by 70% which is primarily of the increased efficiency in dairy production systems, reproductive efficiency, management, etc. There are around 110 processing plants in Québec. 82% of the milk produced is bought by three companies named Agropur, Saputo, and Parmalat. The rest 18% of the milk is purchased by mid-sized companies. There are two main milk markets in Canada: The fluid milk, that accounts for 28.9% of the milk market and consists of table milk and fresh cream. The second is the Industrial milk market that accounts for 71.1% of the milk market and consists of the processed products like cheese (more than 50%), butter (approx. 30%), yogurt, ice-cream, etc.
CHALLENGES
The biggest challenge to the dairy sector in Canada are dairy alternatives that are available in the market which are becoming quite popular; for instance, products like soy milk, coconut milk, almond milk yogurt, vegan slices, non-dairy ice cream are acting as replacements for milk and its products like yogurt, cheese and ice-cream. These products are at par with the dairy products in terms of nutrition value as well.
Moreover, because of the environmental and animal rights concerns, consumers are shifting towards plant-based products. All of these factors tend to negatively affect the dairy industry in the coming years.
PRESENT SCENARIO
At present, the dairy industry, along with other sectors is being massively affected because of the COVID-19 outbreak, also called the Coronavirus disease 2019. It has been characterized as a global pandemic that has killed a significant number of people, resulting in nationwide lockdowns in many countries. The dairy sector in Canada operates under the Supply Management System i.e., milk is produced according to its demand in the Canadian marketplace or consumers.
In Québec, the uncertainty in the dairy demand has led to great losses. The dairy processing industries have been shut in support of social distancing in order to prevent transmission of the virus and flatten the COVID-19 curve. The farmers are limiting human interaction to stop the spread of disease, while equally ensuring that the important operations are continued to supply essential products to the customers during the tough times. The availability of transportation to transfer various products to and from the farms is also causing trouble.
The local dairy farms in Québec are suffering due to the closure of restaurants, as they utilize a large number of dairy products after these are processed in the dairy industries. It has led to a surplus of milk and there is no way to process it before it goes bad. The sudden closure of hotels, schools, offices as a part of social distancing is forcing the farmers to discard gallons of perfectly fine product because there are no processing facilities available to take it. It shifts the demand from processed dairy products to fluid milk.
Apparently, it seems like the demand for dairy products particularly liquid milk is increasing since the customers are now stocking up products in bulk so as to limit their visits to the grocery stores because of risk of contracting the disease but in actual, it remains constant. The products that people bought in some time intervals are now being bought in a single visit, in large quantities and it does not change the fact that people will consume the same amount of product in a given period of time.
For example: Assume that a person consumes three packets of milk in one week and visits the grocery store thrice a week to buy individual packets. Now that same consumer is buying 3 packets for one week by visiting the store once. Though this clearly shows that the overall consumption remains constant, it is also challenging for the producers to meet the undefined demands as the disease continues to spread.
In addition, fluid milk cannot be stored for a prolonged period of time because of its perishable nature and short shelf life. Due to travel restrictions, the products cannot be exported to other places as well, ultimately wasting the product.
EFFECT ON ANIMALS
In Québec, the producers calve their cows in the spring season (March-May) so as to make use of the longer days and warmer weather of the summer season ahead, which also means that they have peak milk production during this season. The milk production of a high producing animal cannot be stopped abruptly as it is very difficult for the animal to adapt to sudden changes. It has to be milked regularly in order to keep it healthy. Reducing the milk production gradually is a solution, but it has its own risks because there is always a possibility that the demand may shoot up in the future again. In case an animal falls sick, there are chances that it may not be given proper treatment because of the unavailability of concerned people because of Coronavirus.
As of now, there is no idea of how long the Coronavirus can last or how long will it take to develop its vaccine, hence affecting many industries negatively, especially the dairy sector in Québec and all over the world in different ways.
Therefore, influenced by all these factors, the future of Québec and the Canadian dairy industry is very uncertain and is likely to suffer adversely in the coming years.