Posted on 05/01/2016, 11:00 am, by mySteinbach

Canada’s dairy farmers are benefiting from growing demand for various specialty products, but will have to continue to modernize and innovate to remain competitive, according to J.P. Gervais, Farm Credit Canada’s (FCC) chief agricultural economist.

“The industry is entering a new era, in which modernization of both dairy production and management practices will be key to future success,” said Gervais, in releasing FCC’s dairy sector report. “Innovation is the primary driver of productivity in Canada’s dairy sector. It allows producers to tap into the growing demand for specialty dairy products in Canada, as well as remain competitive in our domestic market.”

The report notes that Canadian dairy consumption has grown slowly over the last decade and is projected to continue to increase, largely due to positive consumption trends in butter, yogurt and specialty cheeses.

Yogurt consumption is expected to increase 21.6 per cent and specialty cheeses by 9.2 per cent by 2024.

Between 2009 and 2015, the consumption of butter increased 11 per cent, due to shifts in preferences for food with fewer health concerns and as alternative uses in cooking. In late 2015, already depleted Canadian butter supplies were further strained during the Christmas baking season, illustrating a renewed demand for butter.

Increased consumption of yogurt and specialty cheeses has helped offset declining consumption of the more traditional dairy products, such as milk and ice cream, over the past decade. However, Agriculture and Agri-food Canada’s long-term projections suggest Canada’s milk consumption will slowly climb, with a 6.8-per-cent overall increase between 2015 and 2024.

“Further development of unique Canadian dairy products that meet changing consumer preferences will help sustain and strengthen demand among Canadian consumers,” Gervais said. “That’s why innovation needs to continue to be top of mind for Canada’s vibrant dairy industry.”

Gervais believes Canada’s dairy producers can meet a number of challenges – including shifting consumer food preferences – through product innovation and by continually improving the efficiency of their operations.

“Modernization of both dairy production and management practices will be key to our competitiveness,” Gervais said. “Continued refinement of management practices could result in improved efficiency and productivity in dairy operations of all sizes. This will support a healthy Canadian dairy sector in the long-term.”