Canadian dairy farmers face a mixed outlook for 2025, with slight price dips offset by growing demand and sustainability gains. Despite challenges, the industry shows resilience, with projected market growth to $22.92 billion by 2033. Adapt, innovate, and stay informed to milk the most from this evolving landscape.
Summary:
Canadian dairy farmers face both challenges and opportunities. Milk prices may dip slightly, but farm cash receipts and consumer demand for diverse dairy products are rising. Sustainability remains a focus, with efforts to reduce the industry’s environmental impact. Government support and trade considerations, such as those involving CUSMA, will be necessary. Success will hinge on farmers optimizing operations, adopting new technologies, and adjusting to consumer trends. Farmers can turn these challenges into growth and innovation with the right strategies.
Key Takeaways:
Expect a minor reduction in farmgate milk prices by 0.0237%, but look forward to potential growth through increased production.
Projected increase in farm cash receipts by 3.0% due to higher milk production, alongside incentives from the Western Milk Pool.
The Canadian dairy market is anticipated to grow significantly, fueled by consumer demand for diverse and health-conscious dairy products.
Sustainability efforts are crucial, and notable reductions in greenhouse gas emissions, water use, and land use have been made.
Government support continues with compensation and programs focused on modernization and innovation in the dairy sector.
Look out for potential challenges from trade agreements, but rely on a stable supply management system to weather uncertainties.
In 2025, implement practical strategies to enhance operations, such as optimizing herd efficiency, extending grazing seasons, and embracing technology.
Canadian dairy farmers face a complex landscape of challenges and opportunities. The industry is poised for cautious optimism, balancing slight price adjustments with growing demand and evolving market dynamics.
Slight Dip in Milk Prices but Steady Growth Ahead
The Canadian Dairy Commission (CDC) has announced a marginal 0.0237% reduction in the benchmark price for milk starting February 2025. This minimal adjustment—less than one cent per liter—reflects a delicate balance between production costs and market demands.
Why the Price Adjustment?
Feed costs have eased, like a well-maintained pasture
Other farm expenses have stabilized, similar to a level milk tank
The Consumer Price Index is still rising, which partially offsets the decrease
Think of this price adjustment as fine-tuning your milking equipment – it’s a minor tweak to keep everything running smoothly.
Production and Revenue: More Milk in the Pail
Despite the slight price dip, there’s good news on the production front:
Cost Category
Survey Results
Survey Results Indexed to August 2024
Change ($/hl)
Change (%)
Total Costs
93.09
90.36
-2.73
-2.9%
Purchased Feed
23.26
20.41
-2.85
-12.3%
Non-feed Costs
69.83
69.95
0.12
0.2%
All values are in $ per hl unless otherwise stated Source: Canadian Dairy Commission
This table illustrates a significant 12.3% decrease in feed costs, directly benefiting your financial performance. It’s like getting a discount on your cattle feed without compromising quality.
Other positive developments include:
Farm cash receipts (FCR) are projected to grow by 3.0% in 2025, reaching $9.15 billion
This growth is mainly due to increased production, not price hikes
The Western Milk Pool is offering two incentive days per month until November and a 2.0% – 2.4% quota increase from March 1, 2025
These incentives are like adding an extra row of corn to your silage field – more growth opportunities.
Market Demand: Consumers Still Thirsty for Dairy
Here’s a reason to smile during your evening milking routine:
Report Attribute
Key Statistics
Base Year
2024
Forecast Years
2025-2033
Historical Years
2019-2024
Market Size in 2024
USD 15.4 billion
Market Forecast for 2033
USD 22.92 billion
Market Growth Rate (2025-2033)
4.70%
Source: IMARC Group
This table presents the expected growth of the Canadian dairy market from 2025 to 2033. It’s like watching your herd grow – steady and promising. The market is expected to grow from USD 15.4 billion in 2024 to USD 22.92 billion by 2033, at 4.70% annually. Just as rotating pastures provides diverse nutrients for your herd, offering a range of dairy products caters to different consumer preferences.
Sustainability: Greening Your Pastures
Sustainability is the heartbeat of your dairy farm, essential for nurturing growth and longevity in modern farming practices. Here’s what you need to know:
The dairy sector has made significant strides in reducing its environmental footprint:
17% reduction in greenhouse gas emissions
10% decrease in water usage
26% less land utilization
15% reduction in feed consumption
These changes, like fine-tuning the balance of nutrients in your cattle’s diet, yield gradual yet substantial improvements in your dairy operation.
Government Support and Trade Considerations x
The government acknowledges the challenges dairy farmers face, particularly concerning trade agreements. Here’s what’s available:
$1.2 billion in compensation from 2023-24 to 2028-29 for dairy producers affected by CUSMA
$250 million available in 2024-25 for direct payments to eligible supply-managed cow’s milk producers
Additionally, monitor trade discussions, especially regarding CUSMA. While uncertain, remember that the supply management system offers a stable foundation, similar to a sturdy barn in a storm.
Practical Tips for Navigating 2025
Optimize your herd: Focus on improving your Economic Breeding Index (EBI) to increase efficiency
Extend your grazing season: Maximize pasture use to reduce feed costs
Embrace technology: Consider investing in digital platforms for better supply chain management
Diversify your product offerings: Explore value-added dairy products to tap into changing consumer preferences
Stay informed: Keep up with market trends and trade developments – knowledge is as valuable as a high-producing cow
The Bottom Line
As we move into 2025, the dairy industry faces challenges and opportunities. While profitability might slightly dip, strong margins and growing demand provide a solid foundation. Canadian dairy farmers can ensure their operations thrive by focusing on efficiency, sustainability, and innovation.
Successful dairy farming is similar to caring for a healthy herd—it demands constant attention, adaptability, and a forward-thinking approach. Stay resilient and keep innovating; your dairy operation will continue to yield results as reliably as your best milking cow does.
Bullvine Daily is your essential e-zine for staying ahead in the dairy industry. With over 30,000 subscribers, we bring you the week’s top news, helping you manage tasks efficiently. Stay informed about milk production, tech adoption, and more, so you can concentrate on your dairy operations.
Learn about important events, mergers, and market trends in the global dairy industry for the first half of 2024. How are companies changing to meet new consumer demands?
With new technology developments, market swings, and strategic mergers and acquisitions driving fast change in the global dairy sector, Important events on many continents in the first half of 2024 have molded the direction of the industry. These phenomena point to more general trends and economic transformations from leadership transitions to creative sustainability initiatives. This thorough study explains how these developments affect consumer tastes and world marketplaces. We address essential events like Danone’s strategic sale of Horizon Organic and Wallaby premium dairy businesses and Molly Pelzer’s resignation from Midwest Dairy. Knowing these changes is necessary as the dairy sector significantly affects local farmers and foreign commerce. Maintaining knowledge of these critical events helps you understand present market circumstances and prepare for trends influencing consumer behavior and corporate plans.
January’s Dairy Delight: A Month of Pivotal Strategic Moves and Groundbreaking Sustainability EffortsJanuary witnessed a flurry of global activity in the dairy sector. In the USA, Midwest Dairy CEO Molly Pelzer announced her retirement in March 2024, while Archer-Daniels-Midland, after acquiring Revela Foods, bolstered its presence in dairy products.
January also saw the formation of strategic alliances in the dairy sector. Cathay Capital joined forces with Savencia Fromage and Dairy to enhance Savencia’s market position in China, while Pinlive Foods in China commenced cheese manufacturing at their new Shanghai plant. Similarly, Natural Organic in Australia expanded its operations in Vietnam and Thailand through strategic alliances.
Volac International sold Denkavit, its milk replacer company, in Europe. At the same time, Danone agreed to transfer its Horizon Organic and Wallaby brands to Platinum Equity. Lactalis built a solar power facility in Verdun to help reduce CO2 emissions. This commitment to sustainability is a positive sign for the industry’s future. At the same time, Irish business Lakeland Dairies extended its Killeshandra factory. FrieslandCampina, with an eye on sustainability, released a paper on critical dietary trends in 2024.
While Danone intended to close its Parets del Vallès facility in Spain, PAG Private Equity bought a share in Latvia’s Food Union Europe. Meiji quadrupled its outlay on the Danone Wexford, Ireland facility. Danone also made €100 million investments in Mexico and guaranteed NotCo’s rights to use “milk” on Chilean labels.
Targeting higher production capacity, Imagindairy started operations in Israel using modern precision fermentation lines. Emphasizing sustainability, market growth, and technical developments, these acts show a vibrant beginning to 2024.
February’s Flourish in the Dairy Sector: Strategic Expansions, Sustainability, and Leadership Shifts
February featured notable developments across the dairy sector, marked by strategic expansions, environmental projects, packaging innovations, mergers, and leadership changes.
EkoNiva Group expanded into Xi’an, China, to increase dairy exports through improved brand awareness and logistics.
With the Value4Dairy consortium—led by FrieslandCampina—securing a $5 million grant from the Bill & Melinda Gates Foundation to improve Nigeria’s dairy output and sustainability, Africa achieved progress in sustainability.
Australia and New Zealand improved their efforts at sustainability. Fonterra’s “Naked Mozz” project in Australia removed cardboard packaging, cutting waste and expenses for their Perfect Italiano Mozzarella cheese. Fonterra proposed a 20-megawatt electrode boiler for its Edendale facility in New Zealand to reduce emissions.
In the USA, the sudden closing of the Kansas Dairy Ingredients (KDI) factory in Hugoton was a significant event. Ornua signaled a strategic change by appointing Conor Galvin as its new CEO.
Europe was very active. Arla Foods started negotiations to buy the Semper facility in Sweden, indicating possible expansion. Emmi Group credited critical markets like the USA and Italy for their consistent income and profit gains. With an eye toward plant-based yogurt to satisfy changing customer tastes, Danone rebuilt a factory in France.
These events underline the dynamic character of the dairy sector, which is defined by strategic advancements, sustainability pledges, and leadership changes—all meant to fit and flourish in a fast-changing global market.
March’s Strategic Realignments and Financial Recap in the Dairy Industry
In the dairy industry, March was a time for strategic choices and financial recalibrations covering Europe, Australia, New Zealand, and India. FrieslandCampina’s income dropped 7.1% to €13 billion ($14 billion). Still, operating profit dropped dramatically to €75 million in Europe primarily due to market problems and currency effects. On the other hand, Savencia Fromage & Dairy reported a 3.7% sales rise to €6.8 billion despite a drop in operating profit to €212.9 million brought on by changing raw material and energy prices.
Arla Foods in Denmark said they will close a failing factory by 2025, moving cheese manufacturing to a more effective operation in Taulov. Under geopolitical and internal changes, Danone revealed a strategic divestment—selling its Russian business for RUB 17.7 billion ($192 million). Driven by developments in dairy and plant-based proteins, the firm also announced a 7% sales rise to €27.6 million ($30 million) for 2023.
With financial difficulty in the southern hemisphere, New Zealand’s Synlait Milk Ltd. missed a crucial loan payment and recorded a net loss of NZD 96 million ($57 million) for the first half of 2024. Fonterra reacted by shutting older operations to concentrate on more valuable output. Australia saw fresh investments and closures: Bega Cheese shuttered its Betta Milk and Pyengana factories. Beston Global Food Co. also revealed at the same time a net loss of AUD 18.8 million ($12.4 million). Lactalis, on the other hand, showed dedication to efficiency; it shuttered its Echuca facility but invested AUD 85 million ($56 million) in its Victorian supply chain over three years.
Driven by a robust distribution system and value-driven products, Amul, under Jayen Mehta’s direction, sought worldwide growth and unheard-of income in India.
These advances highlight the dairy sector’s resilience, constant strategic realignment, and commitment to innovation and expansion.
April’s Momentum in Dairy: Strategic Collaborations, Financial Triumphs, and Operational Overhauls
April saw significant developments in the global dairy industry. Together, Qatar and Algeria helped increase the yearly output of powdered milk by 200,000 tons. Danone started the liquidation of DanoneBel in Belarus after asset seizures in Europe.
With a 9% growth, India’s Amul Dairy oversaw Rs 12,880 crore during the fiscal year 2023-24. While China Shengmu’s net profits sharply declined despite an increase in income, Modern Farming Group improved raw milk sales in China.
Australia and New Zealand faced both strategic developments and difficulties. Synlait Milk got a debt payback extension despite continuous problems. To concentrate on higher-value goods, Lactalis streamlined its activities while Fonterra eliminated two processing facilities. Thanks to Yili Group’s investments, Westland Milk Products declared record earnings.
While Saputo saw a little income gain combined with a notable decline in net profit, Royal Milk was approved in Canada to begin manufacturing baby formula.
May’s Strategic Shifts and Ambitious Investments: Boosting Efficiency, Expanding Capacities, and Driving Innovation in Dairy
Valio shuttered two manufacturing plants and relocated activities to Riiheimäki in Europe to improve efficiency. Declining milk yields caused Dairygold to cut cheese output. Arla Foods Ingredients bought Volac, therefore enhancing its sports nutrition range. Kerry Group also established a cheese facility in Charleville to increase production with government backing. At last, FrieslandCampina moved its UK headquarters and opened a new technological center in Malaysia.
Up 9% from last year, Amul Dairy revealed a record turnover of Rs 12,880 crore in 2023–24 in India.
Daisy Brand spent $708 million on a new facility in Boone, Iowa, generating 255 jobs in the United States. While Walmart is establishing a milk processing factory in Robinson, Texas, Oberweis Dairy will shut its North Aurora operation after bankruptcy. Darigold named Allan Hattum chief executive. General Mills is considering selling its North American yogurt company—including Yoplait—for about $2 billion. Mars Inc. started a $47 million project on environmentally friendly dairy farming. Nestlé sold Grupo Gloria its Cayambe, Ecuadorian plant. Danone finished acquiring Functional Formularies with Ohio bases.
Nestlé confirmed its Latin American footprint by selling Grupo Gloria its Cayambe, Ecuadorian factory. Tropicale Foods is now concentrating its output on Texas and Ontario, California, after closing its Modesto, California facility.
June’s Global Dairy Dynamics: Strategic Shifts, Facility Overhauls, and New Leadership Amid Market Challenges
Strategic actions, financial outcomes, and new facility debuts defined the transforming global events the dairy industry experienced in June. In Australia and New Zealand, the sector faced apparent difficulties. High expenses, dwindling sales, and unpaid debt for New Zealand’s Synlait Milk caused numerous suppliers to stop delivering milk. NZD 19 million ($12 million) was lost, according to Oceania Dairy. But looking for fresh guidance, Australian Dairy Nutritionals hired Mahi Sundaranathan as CEO. Two elderly Waikato facilities were closed, and Fonterra announced leadership changes. In line with its optimizing strategy, Saputo sold Coles Group Ltd.’s Australian fresh milk facility for CAD 95 million ($70 million).
Critical events in Europe included the Dutch business DL MI under Royal Friesland Campina, which was building a new dairy facility in Malaysia, tripling output capacity. Unternehmensgruppe Theo Müller’s UK business bought Yew Tree Dairy, strengthening its dry product line. It only shelved its first UK plant proposal. At the same time, German cooperative DMK Group announced closing its Dargun factory because of low milk quantities. Lactalis intended to shut down its Romanian operation and concentrate on other sites. Kerry Group expanded production by building a new cheese facility in Ireland. DMK Group bought Polish Mlekoma Dairy to increase their European activities. Ehrmann AG bought Trewithen Dairy from the United Kingdom.
Suntado opened a sizable manufacturing plant in Idaho, USA, which increased raw milk processing capacity. Focusing on cheese manufacture and improving technical capacity in Wisconsin, Saputo announced the closing of six US plants. Citing worldwide market circumstances, Saputo witnessed a 1.7% revenue gain but a 42.1% net profit drop financially.
Because of declining pricing and modest worldwide dairy demand, Saputo’s performance in Canada followed global trends with higher income but lower profitability.
Aiming for 2.8 million bottles daily, Yakult Honsha opened a new facility in the Philippines to accommodate growing demand, which is seeing growth in Southeast Asia. Fonterra intended to launch a new applications center in Wuhan, China, to increase its regional visibility by September.
The Bottom Line
Strategic activities, financial changes, and sustainability initiatives have defined the first half of 2024 in the global dairy sector as proof of resilience among changing market circumstances. Significant events include mergers, sustainable technology, market diversification, and leadership transitions, underline the dynamic character of the sector. The industry is still dedicated to strategic development, creativity, and sustainability, improving output, broadening market reach, and prioritizing sustainable practices. These changes demonstrate how actively the dairy sector determines its future in line with world sustainability objectives, using technology and changing to meet customer needs. Staying alert and creative will help stakeholders guarantee a prosperous and sustainable future in the second half of the year.
Key Takeaways:
Leadership Changes: Major leadership transitions occurred, including the appointment of new CEOs and strategic retirements.
Market Expansions: Several companies expanded their presence in new markets, including Nutura Organic’s growth in Vietnam and Thailand.
Mergers and Acquisitions: Noteworthy deals include ADM’s acquisition of Revela Foods and Danone’s divestment from Horizon Organic and Wallaby operations in the USA.
Strategic Partnerships: Partnerships like Cathay Capital’s collaboration with Savencia to bolster the latter’s footprint in China were prominent.
R&D Investments: Substantial investments in research and innovation, such as Valio’s “Food 2.0” project, aimed to reshape the future of food systems.
Sustainability Efforts: Initiatives to reduce carbon footprints, such as Lactalis’s new solar plant, highlighted the industry’s move towards sustainability.
Production Efficiency: Numerous companies, including Fonterra and Danone, announced plant closures and consolidations to enhance production efficiency.
Financial Highlights: Revenue fluctuations and profit changes were reported by major players, reflecting market conditions and strategic decisions.
Technological Advancements: Investments in technology and infrastructure, such as Mars Inc.’s sustainable dairy production plan, underscored the focus on innovation.
Summary:
In the first half of 2024, the global dairy sector experienced significant changes due to new technology, market swings, and strategic mergers and acquisitions. These events impacted consumer tastes and global marketplaces, emphasizing the importance of understanding current market circumstances and preparing for trends influencing consumer behavior and corporate plans. Key events included Midwest Dairy CEO Molly Pelzer’s retirement, Cathay Capital partnering with Savencia Fromage and Dairy to enhance its market position in China, Pinlive Foods starting cheese manufacturing in Shanghai, Natural Organic expanding its operations in Vietnam and Thailand, Volac International selling Denkavit in Europe, Danone transferring Horizon Organic and Wallaby brands to Platinum Equity, and Lactalis building a solar power facility in Verdun to reduce CO2 emissions. In February, the dairy sector experienced notable developments, including expansions, environmental projects, packaging innovations, mergers, and leadership changes. In April, Qatar and Algeria contributed to a 200,000-ton increase in powdered milk output. In May, strategic shifts and ambitious investments were made, including Valio shuttering two manufacturing plants, Dairygold cutting cheese output, Arla Foods Ingredients buying Volac, Kerry Group establishing a cheese facility in Charleville, and FrieslandCampina moving its UK headquarters and opening a new technological center in Malaysia.
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