Opportunities  &  Options  for  Organic  Dairy  in  the  

Maritimes    

Roger Henry & Alyson Chisholm

Opportunities  for  Ca0le

Ø All cattle dairy production in Canada requires quota

Ø  1 kg of quota costs $25,000 Ø  1kg allows the farm to sell one Kg of butterfat / day Ø  Takes 25 liters of 4% butterfat milk to make 1 kg of

butterfat

Currently  Own  Quota    &  

Interested  in  processing  milk

Ø Initial Considerations:

I.  Market II.  Processing III.  Distribution

Markets  

Ø Number 1 thing to consider Ø Do you have a market? Ø Can you produce a product for that market with a

margin (profitability)

Processing  

Ø Will your product be made to Federal or Provincial health specifications?

Ø  Important not to limit the market right from the start. Provincial severely reduces your markets

Ø Do you build a plant or contract it out to an established processor?

Ø  Before you build get the plan approved by licensing body

Processing

Ø Any cattle dairy processing requires a license from the Dairy Farms of your province

Ø  2 types of processing licenses

Ø On-farm – allowed to process own milk, cannot buy in milk Ø Commercial – process milk from other farms

Distribution  

Ø How will your product be distributed? Ø Are other dairy companies willing to distribute your

products? Ø Can your product be transported with other foods? Ø  Is the temperature correct?

Distribution

Ø Very Critical, as it can put you out of business over night - distribution cost changes can wipe out a margin

Ø  Important to have these costs nailed down before starting and have solid contracts

Ø Distributor may only want to carry some of your products as others compete with theirs

Diversify    -­‐‑  Do  Not  Put  All    Your  Eggs  in  One  

Basket   Ø When your product becomes more than 10% of the

product distributed or retailed by a large cooperation you are in a vulnerable position. If they drop your product your business could go broke very quickly.

Production  will  be  the  easy  part!!

Ø Milking the cows and making the product will be the least of the issues around any dairy production and processing business and both of these are not for the faint of heart!!

“Dog  eat  Dog  World”  Keeping  Products  in  the  

Marketplace  

Ø Marketing will be a constant challenge Ø Only certain people have good marketing skills

A  Successful  Business  has  …

Ø A good product, good accounting system, and

successful marketing plan Ø Accounting allows one to continually know if the

business if profitable, very important as well Ø  Recognize your weakness and be willing to hire to

fill the gaps Ø  Rare to find someone who is good in all three areas

many are good in 2 of the 3 but very rare for one person to do all three well. ( I do not like bookkeeping or I do not like collecting the money)