Update on demographics of the Canadian Dairy Industry for the period 2011 to 2016

Abstract

Between 2011 and 2016, the number of dairy operations in Canada decreased by 13.3%. Mean herd size increased from 65 to 73 animals per farm. The ratio of older (> 60 years old) to younger (< 31 years old) producers also increased. The age structure of the industry suggests that consolidation will continue for the next decade, which has implications for the provision of veterinary services to dairy operations.

The Canadian dairy and cow-calf sectors have experienced significant consolidation since 1991. Jelinski et al (1) previously reported that the number of Canadian dairy producers and farms decreased by 49% and 62%, respectively, between 1991 and 2011. Furthermore, as of 2011, 46% of dairy producers were > 50 y old, but more significantly there were 2 producers > 60 y old for every producer < 31 y old. This age structure strongly suggested that the dairy industry would continue to consolidate in the coming years. The rapidly changing demographics of the dairy sector reflects Canada’s underlying age structure. That is, a very large cohort of “baby boomers” began to retire around the time of the 2011 census and this trend is expected to continue until the 2026 census (2,3).

The purpose of this update is to describe the changes to the demographics of the Canadian dairy industry from 2011 to 2016 and discuss their potential implications with respect to the need for veterinary services. Furthermore, the Canada-European Union Comprehensive Economic and Trade Agreement (CETA) entered into force provisionally on September 21, 2017 and the Canada-United States-Mexico Agreement (CUSMA) was tentatively agreed to on November 30, 2018. The Canadian dairy industry has posited that these agreements will have deleterious effects on the industry, thus this update provides an opportunity to capture demographic data regarding the Canadian dairy industry before these agreements come fully into effect.

All source data were derived from Statistics Canada’s Census of Agriculture. Statistics Canada was contracted to perform a custom data extraction using parameters identical to those of the previous study (1). In brief, data were provided on the number of dairy operators stratified by gender (male, female), age (< 26 y, 26 to 30 y, 31 to 35 y, 36 to 40 y, 41 to 45 y, 46 to 50 y, 51 to 55 y, 56 to 60 y, and > 60 y), herd size (< 51, 51 to 100, 101 to 200, 201 to 300, 301 to 500, and > 500 dairy cows and replacement heifers > 1 y old) and region (Canada, Atlantic Canada, Quebec, Ontario, western Canada). Census of Agriculture reports were also accessed in order to obtain data on the number of dairies and dairy cows (females which have produced a calf ) by province (4). Dairies were defined as an agricultural operation that produced milk intended for sale. Farm operators were defined as those persons responsible for the management decisions in operating the farm including owners, tenants, and hired managers (5). The datasets were subject to random rounding in that data cells with < 5 producers were randomly rounded so that data could not be associated with a specific dairy operation.

The dairy industry has continued to consolidate with the number of dairy operations in Canada decreasing by 13.3% from 2011 (14 883 dairies) to 2016 (12 895 dairies). Concurrently the number of dairy cows in Canada decreased by 2.3% (961 726 to 939 071). Mean herd size increased from 65 to 73 cows per herd (Figure 1). This represents a 13% increase in herd size and this increase was similar across all regions. The largest average herd size was in western Canada (101 animals per herd) and the smallest average herd size was in Quebec (62 animals per herd).

Figure 1.

Average number of dairy cows (excluding heifers) per herd by region and census year. Average herd size was calculated from the number of herds (n = 12 895) and dairy cows (n = 939 071) reported by Statistics Canada on national and regional levels. Data from years before 2011 were originally reported in the study which this article updates (1).

Arguably, consolidation towards fewer but larger operations is driven by both demographics and economics. With respect to demographics, approximately half (52.7%) of dairy operators were > 50 y old, with 20.4% being > 60 y old (Figure 2). The ratio of older (> 60 y) to younger (< 31 y) producers was 2.4:1, an increase from 2.0:1 in 2011 (6). The ratio of older to younger producers was highest (3.2:1) on dairies with less than 51 cows. The ratio was similar for farm sizes ranging from 1.8:1 (51 to 100 cows) to 2.2:1 (101 to 200 cows). The age demographics strongly suggest that a significant proportion of older operators with smaller dairies will retire in the upcoming years and, given the comparative lack of younger operators, the trend towards fewer larger dairies will increase.

Figure 2.

Age distribution (%) of Canadian dairy operators for the census years 1991 to 2016. Age distribution was calculated from the number of dairy operators (n = 26 935) reported by Statistics Canada. The number at the top of each bar represents the ratio of older operators (> 60 years of age) to younger operators (< 31 years of age). Data from years before 2011 were originally reported in the study which this article updates (1).

Despite the trend in consolidation, total Canadian milk quota increased by 8.9% between May 2011 (26 043 573 kg butterfat) and May 2016 (28 367 836 kg butterfat), and from May 2016 to November 2018 it increased by a further 21% to 34 309 488 kg butterfat (7). While the rapid increase in quota between 2016 and 2018 is unlikely to be sustained, the long-term trend of the industry since 2011 has been for a gradual increase in quota. We anticipate that this increase in production alongside decreased dairy numbers will result in a continued increase in the number of cows per farm. The magnitude of the increase in herd size (13%) did not differ between herds that are in the eastern provinces that make up the “All Milk Pool,” otherwise known as the P5 provinces, and the western provinces. The price of quota is capped in the P5 provinces. Given the similar magnitude in herd size increase, regulations regarding sale and purchase of quota do not appear to have affected the rate of consolidation.

Increased dairy size results in a need for either increased numbers of employees per farm or increased technology use. Skilled farm labor is often in short supply and dairies may hire immigrant workers to address this labor shortfall. Previous work has indicated that a reliance on immigrant labor and any associated language barriers can lead to communication challenges resulting in errors in animal management including impaired disease detection and treatment (8). These errors may lead to increased antimicrobial use, impaired animal care, and reduced biosecurity. To ensure the successful implementation of farm-specific protocols for disease detection and treatment, animal care and biosecurity, veterinarians may need to be aware of communication challenges associated with immigrant labor and strategies to overcome these. This will allow veterinarians to respond to the needs of producers and continue to support improvements in animal health, welfare, and dairy production (9).

Recent years have seen improvements in the detection of mastitis, fertility, locomotion, and metabolism using automated systems (10). For example, several companies market technologies for pregnancy testing using either blood or milk (10). Despite these improvements, most Canadian dairies identify pregnancies using either ultrasonography or rectal palpation (11) and most dairy veterinarians perform pregnancy diagnosis at least once per month (12). Reasons for the slow uptake of these technologies may include a lack of training of dairy operators and their advisors and the need for further refinement of the technologies themselves (8). As dairies increase in size, dairy operators may opt to become better trained in automated dairy management. As a result, pregnancy detection by blood or milk assay may become more common. This has potentially significant implications for veterinarians given the frequency at which veterinarians perform pregnancy diagnosis.

Despite the demographic changes observed, Canadian dairy producers remain younger than cow-calf producers (13,6). The existence of supply-management has been hypothesized to result in stability of milk prices, increasing the attractiveness of this industry to younger producers (1). Each provincial dairy board has invested in new entrant or dairy farm start-up programs that assist farm operators in overcoming the cost of purchasing quota. These programs may, in part, be responsible for the difference in age between dairy and cow-calf producers.

Future change in the dairy industry may occur as a result of free trade agreements. The provisions of CETA allow for tariff-free import of up to 17 700 tonnes of cheese from the European Union to Canada annually (14). This represents 4% of the Canadian cheese market. The provisions of CUSMA mandate changes in pricing of non-fat milk solids which may increase imports of these to Canada from the United States (15). These changes may result in decreased milk prices in Canada. Decreased milk prices may result in increased herd sizes to maintain cash flow (9). Increased herd sizes may also result in attempts by dairy operators to reduce costs including a reduction in financial resources allocated to each cow and reduced use of veterinary and herd monitoring services (8).

These changes in the industry represent both a challenge and an opportunity for the veterinary profession. It is likely that veterinary involvement with individual animals will decrease. Given that dairy veterinarians continue to perform individual animal work (12), veterinary service delivery must evolve to order to provide dairies with a value proposition. Veterinarians will have to provide more consultative services in which they implement and oversee farm-specific protocols. In their minimal form, these protocols should address areas in which most veterinarians are currently involved, including identification and treatment of sick animals, animal care, antimicrobial use, and biosecurity. Opportunities also exist to further veterinary involvement in which veterinarians can work as part of an advisory team for dairy operators alongside other professionals including those from financial services, agrology, and nutrition. Potential services offered by veterinarians could include providing training and support for automated dairy technologies, fertility, nutrition, and genetics. For example, the veterinarian may play the role of an independent advisor to the dairy operator. This role may involve evaluating evidence regarding adoption of novel technologies and procedures in the light of the particular operation, incorporation of these technologies and procedures into farm protocols, and monitoring their impact. CVJ