Meeting Minutes - Michael Barrett: Trade, Trump and Tirades - April 5th. 2018
Minutes of General Meeting - 5 Apr 2018
Ed Herold called the meeting to order at 10:25am. This later start was scheduled to align with our Annual Luncheon starting time of Noon. There were 45 members plus our speaker in attendance. Ed welcomed our speaker Michael Barrett and our newest club member Len Corby. Andy Curtis announced the coffee morning next Thurs at the usual Airport and The Boathouse. Ray Biffis made activities announcements
Firehall tour 29 May signup sheet now available
Brewery tour 7 June
Ed Herold announced that our next speaker will be our very own member, Ritchie Zelk, talking about his Travels and travel photography including wildlife photography. In addition, Ritchie has a surprise ending to his presentation – all we know is that it is not about birds.
Ed Herold also announced that fees of $80 for our next fiscal year are due April 2018. Please pay Alex Wilson via cheque or cash. John Proctor gave an update on the nominating committee. Please see John if you are interested in volunteering your name to stand for any of the board positions.
Julian introduced our speaker Michael Barrett President & CEO of Gay Lea Foods – see our website for some details. Michael started his talk by recognizing one of our club members Bill Richards who is a retiree of Gay Lea (before Michael started with Gay Lea in 1999).
Gay Lea started in 1948 and became a Dairy Co-operative in 1958 (70 years ago)
They are a major part of the dairy industry in Ontario with 11 production facilities and have recently expanded into Manitoba and Alberta. Their vision is to become a truly national Dairy Co-operative – coast to coast to coast.
They now have over 1000 employees up from 350 in 1999
They have 1350 member farms (about 40% of the farms in Ontario)
They have many brands that we recognize but perhaps did not realize were Gay Lea. See Michael’s presentation on our club website for details
Their business is about 25% retail and 75% food services so we often consume their products without even knowing it – for example, all cream at Tim Hortons is Gay Lea.
Cheese represents about $200 million of total sales of $850 million
Michael then shared a bit about himself – as he put it, some of his biases.
He started as a history teacher
Is a nationalist
Does Genealogy as a hobby and had about 19,000 members in his family tree
He is a cynic about politics (and has never been disappointed)
He is a co-operative evangelist – which he feels plays an important role in socio-economic change (which he will touch on in his talk)
He is a family man with 6 children (5 daughters and 1 son)
He has a strong values ethic and a strong family man
He has a degree in History and Teaching
He in not the typical CEO in that he does not have a degree in business.
Michael went on to describe the human aspect to dairy farming.
He talked about Neil from Napanee whose family has been farming since 1783. Neil was the 75th member of the Gay Lea Co-operative
Neil has been around for a long time – he knows what is happening in the industry
The 3 most important things to Neil are:
His pride of his dairy farm and being part of the dairy industry
His desire to pass the farm on to his 2 sons (this is an area of concern for Neil and most farmers these days since it is becoming more difficult to do because of regulations and big corporate farms taking over the small farms
Michael talked about the importance of family owned farms are vital to the wellbeing, even survival, of small rural communities.
If we open up our boarders to the US, it will be difficult for relatively small family owned farms to compete with US farms with 30 to 50 thousand dairy cattle
The politics of milk
Changes every day with Trump tweets
Years ago he was against NAFTA but has since learned the value of NAFTA in many areas
NAFTA does not mean it makes sense to open all markets to free trade
Michael then went on to describe the “Supply Mgt System” in dairy and why it is important
It controls supply, pricing, and market access
It uses a quota system
It costs $25,000 per cow quota
Most dairy farms (most farms of any type) have $millions in debt – it requires huge investments to keep up with the automation happening in the industry
Many farms are moving to robots
Michael mentioned that he could facilitate a trip for RCMC to one of the highly automated dairy farms in the area – there was a strong indication from members that this would indeed be of interest – ACTION: Ray Biffis and committee to follow up
Supply Management ensure equitable and predictable farm income which allows them to take on the debit necessary to modernize
In upper New York state farms were deregulated which caused a spike in suicides by farmers as they lost their family farms. 12% of the small farms in NY are going out of business every year (small farms cannot compete with big corporate farms without some form of protection).
Michael reviewed statics on food prices and demonstrated that the Supply Mgt Market did not create huge differences in price compared to other countries.
In the USA they do not have a Supply Mgt Market, but they do have other forms of subsidies US Farm Bill provides $50 billion in subsidies to farms $25 billion of which is estimated to go into the dairy industry. It is a similar story in the European Union
Michael went on to argue that we do not want small farms to disappear for a number of reasons
Next Michael described the size and growth of the dairy market in Canada
Per capita consumption of all dairy products with the exception of fluid milk
Cheese and butter in particular are up
Michael then argued that Canadian dairy market is not an entirely closed.
We import $630 million as liquid milk protein concentrates which bizarrely are not listed as dairy products
Canada exports 70 metric tons per year which is small compared to many other countries
EU over $750 million
US over $550 million
New Zealand $350 millioin
Canada exports about 15% of its dairy products and is looking to grow that to 20%
45% of US dairy exports are into Canada
The fact is that Canada not restricting many aspects of the market via Supply Mgt Marketing
Only 2 countries have Supply Mgt Marketing systems – Canada and Japan
One can argue that Canada is a more open market than the USA
Imports as a % of the total market
Cheese - US imports 3% vs Canada 6.3%
Butter – US imports 3% vs Canada 10%
Milk Powders – US imports 8% vs Canada 10%
In the current NAFTA negotiations Dairy has been put aside to be negotiated last – this does not bode well for Canada
Canada is going to loose some of its market with other trade agreements – 4 to 4.5% to EU, 8 to 10% to CIDA & CPTPP and can ill afford to give way more to NAFTA
Society has to decide
New Labeling regulations – government is seeking input from consumers but not the industry
Under proposed regs a bag of potato chips will have a better rating than 250mil of chocolate milk
They are pushing for plant proteins whereas current science shows that there no benefits to doing so
Things like margarine (which typically contains zero dairy) is listed as a dairy product as is Almond Milk
Cottage Cheese regs are 110 pages
The dairy industry tried to introduce a smooth version of cottage cheese by doing nothing more than whipping regular cottage cheese. Regs say they can no longer call it cottage cheese.
The dairy industry needs to make investment to modernize but cannot do so without the support of a Supply Mgt Market system
Society has to decide whether or not it want to help support family farms that are vital to the wellbeing of small rural communities
Q&A’s Question: What about Bovine Growth Hormone which is banned in Canada but not USA? Answer: 10 yrs ago 80% of dairy cattle were given BST in the US, now it is down to about 10% and soon it will be zero so it is no longer an issue it used to be and thus no longer an argument to support Supply Mgt Marketing Question: What percentage of Ontario dairy farmers are members of the Co-operative? Answer: About 40-% Target is 50% Now includes 44 goat farmers Question: Are some large cheese producers buying up and shut down small producers? Answer: Yes but most are focused on exports Question: What about animal welfare? Will that suffer? Answer: Animal welfare has improve substantially in Canada and standards are higher in Canada than the US so yes it is an issue. Question: What about investment in the industry? Answer: Yes investment is required. Gay Lea is investing back into communities - $500K went to local charities. $1.5 million went back to co-op members. This helps sustain local communities. Society has to decide if small rural communities are still of value.
Julian Sale thanked the speaker for his informative story told with humour and a touch of humanity.