The Rural Voice, 1983-08, Page 21Board announces
changes involving
quotas and levies
An increase in quota may come as the
result of improved consumption and a cut-
back in production in Ontario, according
to Grant Smith, Vice -Chairman of the On-
tario Milk Marketing Board. The board
recently announced a number of changes
involving quotas and levis.
Following a recent meeting of the Cana-
dian Milk Supply Management Commit-
tee, the board announced an expected in-
crease in market -sharing -quota (MSQ), ef-
fective August 1st. The board also an-
nounced that there will be no change in
within -quota levies, currently set at $5.14
per hectolitre. And in a reversal from
earlier expectations, officials said that im-
proved market conditions might allow a
rebate of over -quota levies on the first 2 or
3 per cent of production over -quota.
"Domestic requirements are showing a
trend in the right way." said Smith, citing
reasons for the up -tick in MSQ. "Butter
and cheese sales are good."
Approximately one year ago, the dairy
industry was hit with bad news and board
officials said there would not likely be any
over -quota levy rebate. The reversal in this
is "because producers cut back so
much," said Smith. May production was
down 5.5 per cent from last May, and June
down 4.9 per cent from the previous
June." But even if the board does rebate 2
or 3 per cent of over -quota production as
the result of this, "it's still not as much as
we do sometimes," noted Smith.
The marketing board is now suggesting
that producers carefully consider any
planned cutbacks in production, basing
the final decision on their anticipated
quota holdings in the new dairy year. "Pro -
ars shipping slightly above their quota
should not be overly concerned about
reducing production to the level of their
existing quota holdings," said a recent
release from the board.
"Our biggest concern now is that peo-
ple may have over -reacted," added Smith.
"In my own mind, I think too many people
have slaughtered too many cattle. I'm ner-
vous that we could be short of milk this
fall... not in the fluid market... but in the
product market."
Even though domestic trends are good
and Ontario farmers are adjusting produc-
tion, world markets remain weak. As a
result, the over -quota levy rate paid by On-
tario producers may increase from $29 to
$31.70 per hectolitre on August 1st. This
reflects the cost of exporting milk
surpluses.
FARM NEWS
"The world price for skim milk powder
and butter is the weakest we've ever
known. World powder prices are arougd
$650 per metric ton. There's probably
about 550 million tons of skim milk
powder in the U.S. and about 850 million in
the Common Market."
"U.S. production was up 4 per cent
again last year," added Smith Despite the
competition, the Canadian Dairy Commis-
sion has found it possible to forward con-
tract for all our skim milk powder for the
rest of the year," said Smith. So at least
Canada is able to move Its surplus, even if
prices are poor.
Smith was unsure what the Americans
will do with their huge surpluses. He said
skim milk powder deteriorates in its
classification after six months in storage,
and butter even in proper storage can
deteriorate eventually. Meanwhile, at-
tempts to encourage the culling of dairy
cattle and to prompt farmers to reduce
production, are not being instituted.
Debates among U.S. government officials
continue.
"They've got to do something," said
Smith. "The problem with the dairy pro-
ducers in the States, is they keep produc-
ing more milk to maintain their cash
flow."
Smith's outlook on quota prices: Prices
are going down in the near-term, depen-
ding on what happens to commodity
prices. If corn and soybean prices pay
well, then farmers will be less willing to
put the feed through dairy cows. "I think
we'll buy quota this fall, the same as we
did last fail," he said.
And as for the total industry: "I think
things look really good in the dairy in-
dustry, except for that high within -quota
levy caused by the surplus on world
markets.
Eugene Whelan:
Food Council President
Federal minister of agriculture Eugene
Whelan was elected president of the
world food council (WFC).
Mr. Whelan was elected by acclama-
tion. He is the first Canadian to serve in
the post.
The WFC was established by agree-
ment between countries attending the
world food conference in 1974, and was
endorsed by the United Nations' general
assembly in the same year.
The council's goal is to promote and
coordinate international efforts related to
food. It monitors the world food situation
and develops policies to try and solve
food problems.
The WFC is made up of ministers and
responsible for
government officials
agriculture and development from 36
countries.
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THE RURAL VOICE, AUGUST 1983 PG. 19