BC Milk continues to carefully review the demand for dairy products from the impact of the measures taken to reduce the spread of the COVID-19 virus. The Board continues to see strong demand for dairy products being purchased through grocery stores, however as many of you are aware, there are supply challenges from processor to retailer and the biggest impact to BC is the reduction in cream requirements due to the closure of restaurants and coffee chains due to the need for social distancing. The effects of COVID-19 have been felt across the country. Eastern Canada has already restricted its producers to only produce their quota with no credit production and the cancellation of credit exchanges and credit transfers.
The WMP has been in discussions daily in order to determine the best approach to cut production immediately. The decline in total milk sales is not a reflection of a long-term change in the market but is a result of current circumstances and is not considered “permanent.”
The market situation the Board faces is volatile, and it is imperative we reduce the milk supply today while considering the market supply and demand post COVID-19. Thus, the WMP has agreed on a strategy to reduce the milk supply across Western Canada to equal the litres that are currently being removed from the system. Thus, the WMP is implementing similar measures immediately.
Therefore, the following policy now applies to BC:
All conventional producers will be allowed to produce up to their daily quota and nothing extra. Conventional Producers in BC will still be able to conduct credit transfers but will not be able to produce credits brought in until a later date. Therefore, if you are currently at -5 days, you will not be able to move to -4 days for the month of April. 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. However, the Board will actively monitor this policy and take further action if the desired results are not achieved.
Regarding the Organic Market: The organic fluid milk market demand remains stable and at this time requires no decrease in production. The BC specialty market is not reliant on the restaurant sector, with the majority of sales situated in the fresh market retail sector. The Board continues to monitor organic production and will make immediate adjustments if organic market requirements change.
The Board would like to thank producers for their continued flexibility and understanding as we all work to adjust to the new reality that the industry is facing during the COVID-19 pandemic.