Even producers who can’t fill incentive days say it’s best option

LISTOWEL — Dairy incentive days, an opportunity to sell more milk than one’s quota allows, can be frustrating for milk producers who can’t fill them. Farmers operating in tie-stall barns or who have robotic milkers are most-often already operating at capacity and can’t produce more.
But even farmers who can’t take advantage of incentive days say they’re the best option when demand is volatile.

This year has seen more incentive days than any year since 2017: producers had seven shots to squeeze in an extra day’s worth of production. And producers, for the most part, have been able to take advantage. The Jan. 20 incentive day saw producers fill 68.7 per cent of the extra production allowed. Of Ontario’s 3,400 dairy farmers, 2,353 produced extra milk for the incentive day but 22 per cent of them were not able to produce the total amount of extra milk production they were allowed.

Ontario, however, outperforms other jurisdictions in filling incentive days, said Dairy Farmers of Ontario board member Nick Thurler. This year Ontario was consistently filling 50 per cent to 60 per cent of incentive day production requests, whereas most other provinces were around 30 per cent to 40 per cent.

While some producers would prefer a more permanent quota increase to a temporary boost, the problem comes when it’s time to claw that quota back. Incentive days fill a niche in supply management; they give the industry flex to meet temporary increases in demand like schools reopening in the fall, a common time for DFO to offer an incentive day. The DFO only looks at changing quota based on long-term butter stock forecasts from the Canadian Dairy Commission, because a change in quota allocation is a bigger deal, whether it goes up or down. If quota has to go down, that means taking equity away from farms; always a tough decision but sometimes a necessary one, Thurler said.

Dave Johnston farms at Listowel in Perth County and milks 60 cows on two robots. The farm expanded this year, buying a nearby tie-stall operation.
Historically, the farm has struggled to fill incentive days, he said, but the addition of the tie-stall barn has helped with that. “Just tie ‘em up and milk ‘em.” The problem with robots isn’t capacity — each robot could easily milk 65 cows by itself — but training, he said. Robot-trained cows are hard to find, and buying an untrained cow is playing Russian Roulette: cows can take anywhere from a couple days to a couple months to train on robots, he said.

Nevertheless, between the new tie-stall and the farm hanging onto a few extra animals, they filled all seven incentive days this year, Johnston said. More advance notice of upcoming incentive days would be welcome, but he appreciates that DFO is in a tight spot and thinks the system works well. “I would prefer incentive days over quota increases and cuts coming more often.” While not all incentive days are predictable, fall typically sees at least a couple, which farmers can and have planned for. And the alternative of constant quota allocations and cutbacks is an unwelcome one. Better for farmers to miss out on opportunities on incentive days, than incur penalties from clawed-back quota.

For smaller farms, especially with tie-stall barns, it can be nearly impossible to fill incentive days but many support the system anyway.

Eastern Ontario dairy farmer Greg Mount milks 35-40 Ayrshires and Jerseys in a tie-stall and only managed to fill the October incentive day this year. He’s not keen on milking Holsteins and Ayrshires are hard to find, especially on short notice. And a small farm doesn’t have the space or cash to keep animals around in case an incentive day comes up.

Nevertheless he supports the system. It was painful in the spring when the DFO cut back quota by two per cent with demand falling, and predicting demand is a tricky business at the best of times anyway, he said. “I think incentive days is the fairer way to go.”