By Lisa Boonstoppel-Pot
Just weeks into retirement, former Gay Lea CEO Michael Barrett says he is “looking in the mirror” and seeing so many issues in the dairy industry that need addressing including the need for one voice, the futility of chasing windmills and the need for investment in dryers.
He wasn’t shy about telling dairy farmers that now is a time for courage and action, as he let it all out at the Woodstock Dairy Symposium held in February.
“I am a cooperative evangelist and a governance geek…who is an unabashed supporter of supply management,” is how Barrett launched into his talk. “That does not mean it cannot be tweaked or changed, but I am a fan because I have been around the world and seen what it is like for dairy farmers without supply management.”
Barrett says he is “so frustrated” with messaging on social media saying supply management does not serve Canadians or the industry. “Well, we only need to look south of the border to see that dairy producers in the heartlands are pumping out their milk.” That is what happens when a country produces surplus milk and farmers are only getting paid $10 per hundredweight (cwt). He recalls a meeting of Dairy Farmers of America five years ago when the number one reason for death of American farmers was suicide. “People were losing their farms because the price of dairy was so low.” Yet when he asked other farmers what they were doing to do to survive, their goal was to produce more milk.
In Canada, the supply of milk and its price are regulated by supply management, a governed system of supply and demand.
“Supply management was not bought easily,” said Barrett, who was the CEO of Gay Lea Foods for 24 years. “You have to know what it means and why it came about. Farmers were being held ransom by processors. We have to guard and protect this system and not get overwhelmed by social media and academics who do not know what they are talking about.”
Barrett says the dairy industry needs to apply the business principle of SWOT (strengths, weaknesses, opportunities, threats) to the dairy industry today.
Strengths: The Ontario dairy industry is growing, contributes to the economy, has a quality product and great reputation, believes Barrett.
Weaknesses: Trade deals, disjointed messaging and lack of vision are primary weaknesses, says Barrett.
“We have a lack of vision…we need to speak with one voice,” said Barrett. Until dairy farmers have a specific vision of environmental goals, marketplace goals and investment goals, they will never “sing from the same song sheet”. He suspects many dairy farmers equate having a vision with creating fences. He does not. “I believe creating a vision creates even more vision while a lack of one is like vacuuming without the hose being attached to the machine…you just can’t clean up the dirt.”
Dairy farmers spend too much time chasing windmills. “There is a part of society that will never consume dairy,” said Barrett, “do not spend money on them.” Accept that some consumers will always want to be vegan or plant-based so put those windmills aside and focus on where marketing money can be invested to make a difference.
Government malaise is another weakness and effort needs to be made to help the government understand why they need to support the dairy industry.
Labour is also a weakness, as it is for all businesses, as is lack of processing capacity.
Threats: Further trade concessions, division between provinces and producers and processors, as well as “the next crisis” are all threats to the dairy industry, says Barrett.
“We all know there is going to be another crisis. Palm oil and animal activists have already happened and the only way to deal with the next one is to have commonality,” said Barrett.
Social media continues to be an issue as well. It is so important that dairy farmers respond but not in a way that detracts from the messaging the dairy industry wants to put out. “Do not do any name calling but do use good, hard, facts. Make sure what we do is representative of who and what we really are in the industry,” said Barrett.
Opportunities: Having one voice, creating farmer-owned partnerships in processing and investing in dryers are huge opportunities for the dairy industry, said Barrett.
Dairy farmers are known for their resiliency and generational commitment. It’s this commitment that needs to fund the building of dryers to transform milk into powdered form which makes it far easier to transport. “We need considerable investment in Canada in dryers for processing capacity to process all the milk you can produce,” said Barrett. “If just one dryer goes down in Canada, you will need a home for 150-400 million litres of milk.” Atlantic Canada is “desperate” for one but in reality, Quebec, Ontario and western Canada need dryers as well. To build just four dryers across Canada would require an investment of at least $2.5 billion.
“People may see dryers as old-fashioned but they are not,” explained Barrett. “Milk transports across the globe in a dry capacity. You do not ship fluid.”
Dairy farmers also need to encourage the formation of a Grocery Code of Conduct to ensure retailers aren’t gouging customers on the price of dairy products. “This is important for processors and consumers because we are all taking the hit on the inflation of food,” he said. A code of conduct would enhance transparency on what is happening at the grocery store level.
All of this will require courage, believes Barrett. “Courage to invest and do things differently,” he concluded. ◊