‘This is a taboo topic’: Milk dumping under the microscope

A new study estimates $14 billion in milk has “disappeared” from Canada between 2012 and 2021.

“The numbers don't add up from how much milk is being produced to how much milk is being processed in Canada,” Sylvain Charlebois told CTV News in a recent interview.

Charlebois is a professor at Dalhousie University and director of the Agri-Food Analytics Lab.

He worked with environmental scientists Thomas Elliot (Denmark) and Benjamin Goldstein (U.S.) to figure out what happened to the milk.

“The only conclusion you can make is that this milk was dumped because it just disappears in the system,” said Charlebois.

In fact, the researchers estimate more than six billion litres – or seven per cent – of “raw milk vanished” since 2021.

“This is a taboo topic,” said Charlebois.

“Dairy farmers do not want to talk about surpluses.”

Dairy farmer response

An Essex County dairy farmer referred media questions to the Dairy Farmers of Ontario, who in turn deferred to the Dairy Farmers of Canada (DFC).

No one was available for an interview and the DFC only provided a brief written statement:

The authors of the study acknowledge that much of their conclusions are drawn from “estimates” rather than a robust data set. These data assumptions and calculations would need to be validated independently. Milk disposal is not a unique issue to Canada. Although supply management is aligned to the needs of the domestic market, when there is a surplus of milk, often it is linked to supply chain issues. Milk is disposed only as a last resort after exploring all other alternatives. This is done in accordance with regulations and the costs are borne by the dairy farmers. – Jacques Lefebvre, CEO, Dairy Farmers of Canada (DFC).

A DFC spokesperson did not return a subsequent email, inquiring if the agency was going to independently validate the study’s conclusions.

Neither could the Canadian Dairy Commission (CDC) provide anyone to conduct a media interview.

In a series of written statements, the CDC also disputes the study’s findings:

The authors of this paper base their argument on several unverifiable assumptions:

• The number of cows in Canada and an assumed amount of milk a cow can produce to arrive at a theoretical production figure. These production figures do not match industry figures.
• It is not accurate to assume that the difference between this theoretical figure and sales data demonstrate milk that goes unmarketed.

The CDC said 99.9 per cent of butterfat and 99.1 per cent of solids non-fat produced in Canada was marketed in 2023-24.

Their data only goes back to 2015.

According to the CDC, milk must be processed within two to three days.

“If for any unforeseen event, all the components of the milk cannot be processed in their own province, several solutions will be pursued such as sending it to another province, donating it to food banks, and/or feeding calves or other animals. A very small proportion of the unmarketed milk components were, therefore, discarded. This is mainly skimmed milk and not whole milk,” read the written statement.

The spokesperson did tell CTV News the CDC is “in the process of validating data presented in this paper.”

Is supply management the problem?

Charlebois isn’t surprised by the response from the DFO, DFC and CDC.

“They just say, ‘the data is wrong. We have better data, but we're not going to share with you’,” he told CTV News.

Regardless, Charlebois still believes Canada’s milk supply management program is the best tool to stop milk dumping.

“This is about making supply management a better system for Canadians,” Charlebois said.

“The first step to solving a problem is to recognize that you have a problem and we're not even there yet.”

He believes farmers should be allowed to sell their raw, unpasteurized milk, similar to a practice in some American states or European countries.

He also believes the CDC should make dumping illegal and find new processors for milk surplus, for example, domestic infant formula production.

Carleton University economist, Ian Lee, however, believes Canada needs to get rid of milk supply management.

“We're the only country now in the world with supply management,” Lee said.

He believes if the program was scrapped, farmers would be forced to be more innovative.

“You (farmers) can't pump (out) more milk because your quota strictly limits you to how much milk you can produce and the price,” said Lee.

“There’s no incentive to innovate because it doesn't have any impact on your volume.”

He predicts the cost of milk could be cut in half, more in line with how much milk costs in the United States, where there is no supply management program.

“Everyone's condemned supply management because it has the effect of doubling the price in Canada to approximately double what it would be if supply management didn't exist,” said Lee.

Either supply management or subsidies

On a recent visit to Essex County, CTV News had the opportunity to ask Nova Scotia MP Koby Blois about the study, milk dumping and supply management.

Blois, who is the chair of an agriculture committee, concedes milk dumping is a problem, but he believes supply management isn’t the culprit.

“If we did not have that supply managed system, the percentage of milk dumping would be even higher,” Blois said.

Blois added countries without supply management are subsidizing the industry.

“If we want to be spending billions of dollars a year as taxpayers to intervene in the economy that is so important, a fundamental piece of this country, we can do so,” said Blois.

“But let's go in eyes wide open.”

Blois noted with North American free trade agreements back up for renewal in 2026, now is not the time to be changing the system.

“The Americans certainly want more access to the (milk) market,” said Blois.

“We need to make sure that we're protecting that industry.”

If you would like to read the study, the full report can be found here.