Recently retired Gay Lea Foods Cooperative CEO Michael Barrett believes opportunities will open up for the Canadian dairy sector as farmers in other parts of the world feel pressure from governments to limit their environmental impact.
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Dairy supplies into the global marketplace from New Zealand and the European Union are going to be limited due to environmental regulations, he told attendees at the recent Southwestern Ontario Dairy Symposium in Woodstock. The U.S. will be there to fill the gap but “this presents opportunities for (the Canadian sector) as well.”
Why it matters: Over his years at Gay Lea, including eight years as CEO, Barrett established himself as a trusted voice on the present and future of dairy in Canada.
Barrett stressed that, to take advantage of those opportunities, stakeholders in the sector – producers, processors, governments and academia – need to embrace a common vision.
“We started this process as an industry a couple of years ago,” said Barrett, referring to an effort to respond in a collaborative manner to the threat to Canadian supply-managed dairy from international trade concessions. “It has fallen off the table.”
Barrett began his keynote address on Feb. 22 by noting he didn’t pursue post-secondary studies in dairy science or agricultural economics. But through nearly two-and-a-half decades with Gay Lea, he became well-versed in the intricacies of dairy processing and became a convert to the economic promise of cooperatively run businesses.
Dairy Farmers of Ontario and Dairy Farmers of Canada “don’t like to admit it,” he said, but they’re set up as cooperatives. With that in mind, he spent part of his talk delving into the topic he did pursue in post-secondary studies.
“I worked five years on getting that degree. You’re going to hear some history today.”
Much of it concerned supply management, a system that “was not won easily” in Canada, he said.
Barrett recalled going with then Gay Lea board of directors chair Rob Goodwill to a Dairy Farmers of America convention, where he learned of U.S. producers’ struggles to maintain price consistency. It solidified his support for the Canadian approach.
In signing the Comprehensive Economic and Trade Agreement (CETA) with the EU in 2016, the federal government opened the door to concessions to supply management.
But Barrett said “the worst is behind us now” on CETA’s repercussions. Ninety per cent of the import permits conceded in the deal, predominantly for specialty cheeses, have now been granted.
Before 2016, Gay Lea’s cheese sales had been growing by double digits, he said.
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“And as soon as CETA came in, it flatlined at best. But the worst is over” and there is once again growth in the company’s cheese sales.
The U.S. and New Zealand are now challenging Tariff Rate Quotas initiated by Canada to protect domestic production in Canada. Given this and the possibility of future trade deals – most notably with the United Kingdom – the Canadian sector must remain vigilant, Barrett advised.
But to ensure wider support from society, stakeholders in the industry must begin speaking with a common voice about the value of dairy farming to the country as a whole.
He called for “a new partnership” with the government, producers and processors, putting forth a united message about the resiliency of the sector and its readiness to take advantage of opportunities.
“And why are you resilient? Because you’re not doing it for today. You’re not doing it for your children. You’re doing it for your grandchildren and you’re doing it for your community.”
He called for elimination of what he described as “divisions” that have developed between producers and processors, and between different regions of the country. Crises like Buttergate, animal abuse or (most recently) dumping milk can erode public confidence in dairy farmers.
He called on the sector to stop “chasing windmills” by trying to convert everyone away from anti-dairy viewpoints. Instead, focus on the majority of the public that is open to conciliatory messages.
“We know there’s going to be a next crisis. That’s why it’s crucial that we’re able to speak from a united standpoint (representing) a commonality of purpose and a commonality of vision.”