The Board would like to thank producers for their continuing adaptability and patience in adjusting their production to meet demand during this crisis, especially since we know you are also facing your own challenges not just at a business level, but with your family and friends during this difficult time.
As you’re aware, market demand has been volatile and impossible to predict over the past few weeks. Although we are cautiously optimistic that the market is reaching a new “more even” level of demand, we also know that as the COVID-19 situation evolves, it is difficult to know what patterns are “temporary” and which will remain. We are grateful that the entire industry is working together to adjust where and when they can along the supply chain to ensure that dairy products are available to all consumers during this crisis. To continue to keep producers informed, the Board will participate in a producer “Zoom” video call hosted by the BC Dairy Association on Monday April 20. Please RSVP to Carla Soutar (firstname.lastname@example.org), if you would like to participate.
In the meantime, here are some market and production updates:
- Off farm volume for March was 2,335,788 Litres per day.
- With producers being limited to their daily quota for production, off-farm production has dropped across BC by approximately 40,000 Litres per day since the last week of March.
- Retail fluid orders remain higher than normal but are still volatile week to week. However, other fluid orders that were sold through food service, such as fluid cream, are down significantly.
- Raw milk disposal has ceased in the Western Milk Pool (WMP) as of this week, but this is subject to change, since it is dependent on market demand for fluid and industrial products.
- The WMP is still disposing of varying amounts of raw cream through animal feed or bio-digesters, as needed.
As previously announced, all conventional producers are allowed to produce up to their daily quota and nothing extra. There are two ways you can still adjust your credit position (or move in days) through:
- Credit transfers are still available for repositioning but not for production; and
- Actual over daily or under quota production for the month. Producers will NOT be paid for any milk produced that is over their daily quota. Moreover, all statement deductions will apply to ALL milk produced. This policy is effective, as of April 1, 2020 and is in place until further notice.
Blend and Component Prices for March Production (from Producer Data & Deadlines – April 2020)
The producer component prices for the month of March are as follows: BF=$17.1164, PT=$2.6059, OS=$0.7171. The average BC producer hectoliter return for the month is $84.8693 compared to $85.4741 in February, a decrease of $0.6048. In mid-March, as the COVID-19 pandemic heightened in the province, processors were ramping up fluid production and demand for raw milk was high, but quickly fell off with the closure of restaurants, schools and other industrial users. Although fluid sales traditionally represent high returns, the lack of a need for cream and associated low value processing for other milk components means that the return for March was both lower than the previous month and expectations. Adding to the processing difficulties driving down the return, the February equalization payment to the WMP and P5 pooling partners processed in the March pool was higher than the previous five months by approx. $1M, but in-line with the payment amounts for this time of year for the previous three years.