The men who run the national milk supply management system could learn some lessons from the chicken industry as they ponder plans Agro-Farma Inc. has to produce Greek yogourt in Ontario to market across Canada.
The chicken industry faced a similar situation when the McDonald's restaurant chain was introducing Chicken McNuggets to the Canadian market.
Cuddy Foods Ltd. won the contract to supply the chicken nuggets, but then faced the challenge of getting enough chickens to supply the market.
The men who ran the Canadian Chicken Marketing Agency would not grant Ontario enough quota to meet Cuddy's demand. Those provincial marketing-board directors each wanted a piece of the action for their own province. It was ridiculous.
For a time, Cuddy won federal government approval to import cheaper chicken from the United States to meet its demand. Ontario never did get enough quota to fully supply the Ontario demand for McDonald's so there are, to this day, a myriad of challenges surrounding a fundamental shortage of chickens produced in Ontario.
Agro-Farma is a highly-successful company based in New Berlin, New York state, that introduced a Greek-style yogourt brand called Chobani.
The federal government has granted it temporary permits to ship Chobani from its New York plant to supply the Canadian market. The big Canadian yogourt-making companies are challenging that government approval in federal court; the case is due to be heard April 24.
Now the Ontario Dairy Council has filed an appeal against Agro-Farma's intentions to build a plant in Ontario to supply the Canadian market.
As happened in the case of chicken, the Ontario Dairy Council argues there's not enough milk being produced in Ontario to keep everybody supplied. The council fears that whatever Agro-Farma needs will come out of the supplies that are currently going to competing processors.
So, the obvious way to resolve this is for the national agency to grant Ontario the right to increase milk production enough to meet the needs of Agro-Farma.
Ah, but there we run into the same provincialism that plagued the chicken industry.
That provincialism makes it far too difficult to launch new market-increasing products on a nation-wide scale from a single processing plant in one province.
National supply management would work better if it were, indeed, one national system not broken into 10 or 11 provincial and territorial pieces. But the chances of that happening are remote. It's just too darn sensible.
