Canada's Dairy Industry Overview

Canada stands as a major player in the global dairy market, recognized for its substantial production output and advanced processing systems. The country maintains high standards in dairy production, making it a critical participant in the global supply chain.

Milk Production

Canada produces approximately 93.5 million hectolitres of milk annually, reflecting its efficient and robust dairy infrastructure.

Dairy Population

The Canadian dairy industry boasts around 940,000 dairy cattle, primarily located in Ontario, Quebec, and British Columbia. There is also a growing dairy goat population of about 230,000, catering to the increasing demand for goat milk and cheese.

Milk Processing and Product Manufacturing

Canada processes around 92 million hectolitres of milk each year, producing approximately 515,000 tonnes of cheese, including cheddar and mozzarella. The country also manufactures around 100,000 tonnes of milk powder and 30,000 tonnes of whey.

Key Dairy Enterprises

Leading companies in Canada's dairy industry include Saputo Inc., Agropur Cooperative, Parmalat Canada, and Gay Lea Foods. Notable dairy farms include Eagle Ridge Dairy in Ontario, Valley View Dairy Farm in Quebec, and Highland Farms in British Columbia.

Export and Import Trends

Canada exports approximately $400 million worth of dairy products annually, with key markets including the United States, China, and Japan. Exports to the U.S. are valued at around $488 million CAD in 2023. On the import side, Canada imports roughly $1 billion in dairy products each year, primarily from the United States, France, and New Zealand.

Recent Developments in the Dairy Market

Saputo Inc. is closing six U.S. facilities to streamline operations and increase cheese production capacity. Lactalis Canada has endorsed a new Grocery Code of Conduct, while Sodiaal has expanded its presence by acquiring General Mills' yogurt operations in Canada. A significant rise in butter export sales by 171% from the previous year has been driven by a surge in domestic demand.

Technological Advancements in Dairy Farming

In Canada, 97% of dairy herds utilize Artificial Insemination (AI) to enhance genetic traits. The country has achieved a 23% increase in milk production over the past decade, even with 19,000 fewer cattle.

Trade and Regulatory Challenges

Canada faces challenges regarding alleged violations of the USMCA related to dairy market access and milk pricing. Criticism has been directed at Canada's tariff-rate quota (TRQ) policies for being non-transparent and favoring domestic processors.

Investment and Infrastructure

Danone plans a substantial investment in its Boucherville, Quebec factory to boost yogurt tub production by 40% and increase raw milk processing capacity by 20%.

Challenges

A strike in British Columbia affects the collection of milk samples necessary for quality assessments. Additionally, a veterinary medicine crisis impacts dairy herd health due to slow drug approval processes.

Infrastructure Developments

A new milk concentration plant has been inaugurated in Alberta, enhancing value-added processing capabilities in Western Canada.

Trade Discussions

Canada is engaged in dairy trade discussions with the United States under the CUSMA/USMCA agreement, defending its TRQ strategy as compliant with CUSMA requirements. Public consultations are underway to gather stakeholder feedback, shaping government positions for the joint review. The Manitoba government has announced a freeze on milk prices for 2026 to ensure affordability and stable income for dairy producers.

Environmental Concerns

Environmental groups, including the Manitoba Eco-Network, have voiced concerns about potential phosphorus and nitrogen runoff from dairy farms contributing to toxic algae blooms in Lake Winnipeg. Foreign entities, mostly Canadian, have interests in nearly 45 million acres of U.S. agricultural land, with significant Canadian interest in the U.S. dairy sector land.

The Canadian dairy market is experiencing transformations in 2026, driven by a rise in consumer demand for protein-rich products. Additionally, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CUSMA) trade reviews are impacting the supply-managed frameworks that regulate the dairy market in Canada. Higher wheat yields in Canada contribute to cereal production, with FAO forecasts indicating a record global cereal production in 2025. Canada represents a significant export market for U.S. dairy products.

Saputo, a Canadian dairy giant, has decided to divest its Argentine operations. The transaction allows Saputo to focus on other strategic priorities. Saputo has agreed to sell an 80% controlling stake in its Argentina dairy business to Grupo Gloria.

Modified: 2026/02/22

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