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Manitoba | Don't want to interfere with your post Glenn but thought I would try to address Ricks quota question.
Rick, with our quota system, what a dairy is buying is basically a share of the market. So just for example (simple numbers to make it easy) if a province sells 100 lbs of milk every day (assume that is the total demand there is for milk in that province) and a producer has purchased 1 % of the quota for that province he can sell 1 lb of milk each day. (calculations are done on milk solids ( butterfat) so how many lbs of milk you actually sell each day will vary as your butterfat % varies. That % of the market is yours once you buy it. Just like a stock in a company. there is not a connection with a physical cow or cow #'s other than if you have great production you can have fewer cows or if you have awful production you will need more.
If demand for milk goes down (say to only 90 lbs of milk/day your 1 % share of the market will only allow you to sell 0.9 lbs of milk or if it went up to 110 lbs your quota would be for 1.1 lbs per day. As provinces we have a check off that goes to marketing to attempt to improve consumption. But only enough milk to supply the demand is produced. NO More. If we ship more we are penalized and the overproduction is deducted from the next month. Given the amount we invest in quota not being in control is not an option.
the first of each month there is a quota "exchange" where those selling place offers and prices and those wanting to buy place bids. These are brought together and that is how the price is established and quota changes hands.
That is one part of the equation, there are 3. Some refer to it as an old fashioned 3 legged milking stool.
Part 2 is price control. Prices are set based on an established calculation factoring in the various costs of production. Fuel , various feeds, fert, etc. etc. etc. A representative number of farms are selected to establish these prices and the price set based on an average of these prices.
Part 3 is single desk selling. All milk is sold from a single desk. So if a huge multinational company decides it wants to process and sell milk in Canada, great, no problem, but your are going to be paying the established price. no option. if you want to play the game, you play by the rules. (as opposed to paying a price less than the cost of production) It's all about power. And this is the only way the thousands of producers can achieve power. Without it the 3 or 4 players buying milk in Canada could do whatever they wanted. That is how small dairies and big dairies (although not as big as you see stateside) can survive side by side. both have advantages and disadvantages, really depends on what you as a manager want to achieve and wether you want to manage cows or people.
That's a pretty simple explanation but hope it helps. There are some differences on how things are managed between provinces (I'm in Manitoba) but the basic concept is the same) Actual amount of paperwork is almost nothing. Each provinces producers have an elected producer board to manage the implementation of this and it is totally funded by those producers from milk receipts. There is no subsidy or government involvement, producer run and funded. Governments approve of the thing as there is no need to be subsidizing the farms just to keep them alive and the economic spinoff benefits of a healthy ag sector are huge.
If anything was not clear ask away and I'll try to clarify.
Martin
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