New adjustment strategy for dairy industry

Industry, Trade and Rural Development Minister Beaton Tulk, chair of the Economic Policy Committee of Cabinet and Rick Woodford, Minister of Forest Resources and Agrifoods, announced today that the Economic Policy Committee recently met with representatives of the Dairy Farmers of Newfoundland and Labrador to discuss their Dairy Industry Adjustment Strategy.

The dairy industry has been seeking to join the National Milk Marketing Program and hopes to conclude an agreement in the coming months. In doing so, the industry will obtain a quota for industrial milk production (milk used for cheeses, cultured products such as yogurts, milk powders for other products, etc.), which will provide opportunities for value added processing. Currently, the province imports such products equivalent to 79 million litres of milk annually.

The new dairy strategy has the potential to double the industry's value to the provincial economy and create an additional 500 jobs in rural Newfoundland. The provincial dairy industry is currently valued at approximately $100 million and directly employs more than 1,000 people.

Minister Tulk noted: "In order to realize the full potential of this industry, we need to improve the industry's competitiveness and further diversify in value added processing. My colleagues and I are excited by this strategy. It is an example of the strength of our private sector and how collaboration among producers, processors and other key stakeholders can target areas for further development."

Minister Woodford said: "The largest barrier in increasing milk production is the lack of developed land and forage production. Currently, the province imports approximately 30 per cent of its forage requirements which keeps production costs high, given that feed purchases are the largest operating costs." 
Ministers have asked the dairy industry to provide further details on the legislative, policy and/or financial barriers for future development of needed land base.

Robert Walsh, vice-chairman of the Dairy Farmers of Newfoundland and Labrador, indicated that he was pleased with government's response to the industry's new development strategy and looks forward to working in partnership with the province and other stakeholders to move this industry to its next level of growth.

Since the formation of the Milk Marketing Board in the early 1980's, the province's dairy farms have grown from producing just over 9 million litres to more than 33 million litres of fluid milk annually. Most of this production is used for drinking although there is a small amount of secondary processing, such as local ice cream and butter production. 

The Economic Policy Committee is a standing committee of Cabinet, chaired by Minister Tulk. The Committee includes Finance Minister and Treasury Board President Joan Marie Aylward; Tourism, Culture and Recreation Minister Kevin Aylward; Works, Services and Transportation Minister Percy Barrett; Mines and Energy Minister Lloyd Matthews; Labrador and Aboriginal Affairs Minister Ernest McLean; Fisheries and Aquaculture Minister Gerry Reid; Environment Minister Ralph Wiseman; and, Forest Resources and Agrifoods Minister Rick Woodford. Mr. Wally Anderson, Parliamentary Secretary to the Minister of Labrador and Aboriginal Affairs, and Mr. George Sweeney, Parliamentary Secretary to the Minister of Industry, Trade and Rural Development are also members.


Media contact: Sonia B. Glover, Communications, (709) 729-6183.

2001 06 15                                                      4:10 p.m.