Supply management and collective marketing

3b_lamiseenmarcheSupply management

Quebec and Canadian producers control their production level based on the needs of the domestic market. The representatives of producers in all provinces, in consultation with the industry, set an annual production target known as the market sharing quota. When production exceeds that target, the surpluses must be sold in other markets at a much lower price than the average price received in the planned domestic markets.

Cover_Brochure_ANG_2017Download the brochure about supply management

Collective marketing

Quebec’s the some 5,500 dairy farms collectively market more than 3 billion litres of milk under the Quebec Milk Producers’ Joint Plan (1980). Producers have delegated Les Producteurs de lait du Québec to negotiate all sales conditions on their behalf with the representatives of processors. Producers and processors negotiate the prices of raw materials and consult each other through collective marketing agreements and the various committees that have been set up to deal with the issues of plant supplies and milk quality rules. The latter are negotiated based on a target price that is set for Canada by taking into consideration the production costs of the most effective producers and the Consumer Price Index.

The receipts from all planned sales of milk are pooled by producers. They receive the average price based on their monthly milk deliveries.

The conditions for transporting milk from farms to plants, whose costs are assumed by producers, are negotiated with the transporters by Les Producteurs de lait du Québec in a provincial agreement. The collective marketing system allows milk producers to earn their revenues from the market without government subsidies.

The quality of the milk they market is a major concern for producers. Various improvement programs are run by Les Producteurs de lait du Québec. Producers also invest nearby $47 million annually in milk and dairy product research, promotion and advertising.

Collective marketing of milk by producers ensures…

  • A single representative to negotiate all marketing conditions
  • All producers: a fair, standard and stable price for the milk that they market
  • Production adjusted to market needs
  • Processors: a guaranteed supply with the same conditions and prices for all and available to new businesses
  • Priority to high added-value and developing markets
  • High quality standards negotiated with processors
  • Investments in promotion, advertising and nutritional education
  • Joint investments by producers and processors in research
  • Central, coordinated management of the milk sent to the 113 plants in Quebec
  • Provincial negotiation for optimal milk transportation conditions
  • An average milk transportation rate for all producers…
    • Transportation by 260 tanker trucks…
    • That cover some 27 million kilometres every year…
    • Over 578 efficient collection circuits