Results were published in Economics of Milk Production
By Diego Flammini
News Reporter
Farms.com
A new Alberta Agriculture and Forestry report provides insight into the cost of dairy production in the province.
45 of the province’s dairy producers provided financial information from 2016 to be used in The Economics of Milk Production.
The main takeaway from the report is that Alberta, and Canada’s dairy industry is strong, Pauline VanBiert, a research analyst with Alberta Agriculture, told Call of the Land.
“I think the good news story is the fact there was and continues to be a strong demand for milk due to renewed consumer interest in dairy products, the endorsement and use of Canadian milk by large companies and the advancements in technology by processors,” she said.
Some of the highlights from the report include:
- An average provincial herd size of 161 cows,
- The average cost of production rose $64 per cow over the last year to over $7,300 per cow,
- And producers spent an average $78.81 to produce one hectolitre (100 litres) of milk.
Another finding in the report suggests farmers are also reinvesting in their farms to increase production.
“(The reinvestments) are mostly by way of new dairy barns and milking facilities,” VanBiert told Call of the Land. “It seems these new builds or renovations are mainly to accommodate voluntary milking systems or milk robots. This is reflected in capital loans equalling 29 per cent of total investment, up from about 25 per cent in 2015.”
And there were variables in production costs depending on where the farmer is located.
Dairy farmers in northern Alberta spent $7,288 per cow, which is lower than the provincial average, but invested $88.40 per hectolitre, which is above the provincial average.
And in the southern part of the province, dairy farmers spent approximately $8,277 per cow and $84.14 per hectolitre of milk. Both numbers are higher than the provincial average.
Alberta dairy farmers produced 732,336 kilolitres of milk and cream in 2016, with a total value of more than $561 million, according to Statistics Canada.