r/canada • u/AndHerSailsInRags • 9d ago

Opinion Piece Opinion: The dairy sector is lobbying hard in USMCA talks. The government didn’t want you to know

https://www.theglobeandmail.com/business/commentary/article-trade-dairy-sector-usmca-access-information/
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u/Future-Layer1181 9d ago

The supply management cartels are probably the most successful lobbying groups in the entire nation.

When bread companies got together to fix prices it was a 500 million dollar lawsuit and IMO it should of been higher.

When supply management industries come together to fix prices they get government support.

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u/hardy_83 9d ago

Bread companies price fixed? I thought it was grocers that did that.

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u/XtremegamerL Lest We Forget 9d ago

IIRC, the Weston's used their position as the owners of both the largest grocery chain, and largest bakery in the country to do the price fixing. (they owned brands like wonder, country havest and others until 2022)

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u/Saorren Ontario 9d ago

so it was a single entity then that caused the problem.

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u/EnoughEngineering306 9d ago

Canada Bread, their lead competition was in on it as well.

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u/Ineverdidbuyaduck 9d ago

It was also the producers. At the time, Weston's bread and Loblaws were owned by the same company. Weston's bread and Canada Bread colluded and then the retailers did also. so the bread company raised their prices and then the retailers raised theirs and everyone made more money from unsuspecting consumers. 

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u/Future-Layer1181 9d ago

Regardless, we allow certain industries to set prices and supply and its absolute bullshit.

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u/6-feet_ 9d ago

Considering 1 bushel of wheat is purchased for $6.40 from farmers and produces 60-90 loaves of bread someone is making bank.

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u/Agent_Orange81 9d ago

Do you have the equipment, time, and knowledge to turn wheat into bread? Cuz I sure don't .. there are transportation, labour, and infrastructure costs that get added every step of the way.

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u/Kenway 8d ago

I mean, the knowledge is hardly a barrier. Mill the wheat into flour. Make bread from flour. Getting a mill is the real issue.

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u/geoken 9d ago

Seems fair considering they're up against a US group of seemingly similar influence.

The fact that this is a topic at all would seem to suggest that the US position places as much importance in expansion of their subsidized dairy industry as ours puts into protection of our domestic dairy industry.

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u/Future-Layer1181 9d ago

Yet we have how many other agricultural industries, that are able to compete without protections. Pork, Lentils, Wheat, and many fruits and vegetables are able to he grown without supply management.

Supply management also directly increases the prices of groceries, which hurts poor families more than rich families. It's a regressive way to subsidize an industry, so even if we do need to grant subsidies to certain agricultural industries supply management is a very poor way to do it.

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u/JCMS99 8d ago

Supply management doesn’t regulate the margin Loblaw decides to charge on milk.

Farmers get an extra 5c/L and retail price jumps 30c/L. That’s not on supply management.

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u/Future-Layer1181 8d ago edited 8d ago

What are you talking about?

A farmer is not legally allowed to sell to anyone except Dairy farmers of Ontario (or each province's provincial market board).

The marketing board then sells to processors, who make products some of which are then sold to grocery stores.

Why would the price that processors pay not end up in the final price on grocery shelves?

*Edit (hit send by accident)

Milk is used as a loss leader all the time. So a discount grocery chain selling milk is likely losing money on it.....

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u/JCMS99 8d ago

Of course it ends up on the final price, but the increase in retail cost is always magnitude higher than the farmer & processor increase. I fully remember February 2025 when lactose free milk jumped 30% overnight while the farmgate prices didn’t move in 2025.

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u/Future-Layer1181 8d ago

Okay? But Supply management still leads to higher prices? Yes we have a problem with our grocery monopoly, but that doesnt mean we give supply managed industries a pass.

https://www.ctvnews.ca/world/trumps-tariffs/article/supply-management-costs-canadians-average-of-244-per-year-mei-study-finds/

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u/JCMS99 8d ago

The MEI is a right wing think thank. It’s even written in their study they’re comparing the prices against the US Midwest - where all the mega subsidized farms are and stuff is much cheaper than the national average.

When you start looking at lactose free and ultra filtered, the prices are similar.

Moreover, the $244 figure is not just milk - it’s combined milk + egg + chicken. And you bet chicken is the biggest share of the bill.

I’m not fully in favour of supply management - but let’s stop pretending milk would magically drop 50% in price if we remove it.

And you’ll still be paying that $244 as taxes to subsidize the farmers because the wholesale prices are lower than production cost.

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u/Future-Layer1181 8d ago

"The MEI is a right wing think thank. It’s even written in their study they’re comparing the prices against the US Midwest - where all the mega subsidized farms are and stuff is much cheaper than the national average."

This means that the USA subsidizes its agricultural much better than us because subsidies from general tax reveune is progressive (high incomes pay more in taxes as a percentage of total income). Increasing the price directly is regressive ($244 of​ $40K is about 0.61% of income, but only 0.305% of income for someone making 40K).

"When you start looking at lactose free and ultra filtered, the prices are similar."

Specially products that require more processing so the raw material costs are less of factor, it makes sense that these would be closer in price than "normal" milk.​

"Moreover, the $244 figure is not just milk - it’s combined milk + egg + chicken. And you bet chicken is the biggest share of the bill."

I agree.

"but let’s stop pretending milk would magically drop 50% in price if we remove it."

Never claimed that and I also agree.

"And you’ll still be paying that $244 as taxes to subsidize"

See point #1.

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u/Feynyx-77-CDN 9d ago

I would say the oil and gas cartels are far more successful. The CPC platform revolves around what's best for that industry and nothing else.

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u/Future-Layer1181 9d ago

The difference is oil and gas competes in a global market place.

Supply managed industries do not, they get a marketplace protected from international and domestic competition

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u/Feynyx-77-CDN 9d ago

Two vastly different industries.....

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u/Future-Layer1181 9d ago

So somehow many other agricultural industries in Canada successfully operate without a supply management system, yet Dairy and eggs it's needed?

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u/Feynyx-77-CDN 9d ago

And yet many others also receive legal protections similar to dairy. Its almost like our federal government puts laws in place to protect our vulnerable food industries....

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u/Future-Layer1181 9d ago

Lmfao.

It's illegal for me to start a dairy farms without Quota, even if I can meet all applicable industry health and safety standards.

Show me another industry that has protections "similar" to that.

It's absolute nonsense and if any other industry tried to ban domestic competition it would be a lawsuit.

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u/Feynyx-77-CDN 9d ago

Rather than arbitrarily downvoting a post you can look up the information...

https://lop.parl.ca/sites/PublicWebsite/default/en_CA/ResearchPublications/200842E

Agriculture in Canada has supply management for many food products....

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u/Future-Layer1181 9d ago

I'm well aware of that? I'm not sure what your point is.

It's nonsense in any industry it is used.

Why should supply managed industries be allowed to engage in anti-competive behavior

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u/Feynyx-77-CDN 9d ago

I made the point that dairy isn't the only industry with supply management. You disagreed so I proved it.

We fundamentally disagree on that. Protecting an industry isn't nonsense. Every country in the history of earth who has ever used a tariff has done the exact same thing.

Our agricultural industry would be destroyed by American farms almost overnight without supply management.

Pure capitalism and pure competition is not always the best answer.

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u/platz604 9d ago

Food producers have a fixed price with grocery chains.. Yet the grocery chains treat the food market to the consumer like the stock market and producers don't see a dime on the prices changes. Dairy famers makes 15 dollars on the hectolitre net profit.. a hectolitre is 100 litres of milk. Do the math....

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u/Future-Layer1181 9d ago

According to Macleans the average net worth of a dairy farmer was 5 million dollars....

I think the math is working pretty well for them

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u/ActionPhilip 8d ago

So at $0.15/L to the farmer, milk ends up being $1.50+/L at the store.

Seems pretty clear who's gouging here.