Federal Agriculture Minister Marie-Claude Bibeau on Sept. 27 announced Shikha Jain will be the CDC’s commissioner for a four-year term effective Sept. 15.

Jain, who lives at Guelph, is the CEO for GET Corp., a green tech firm focused on conversion on dairy farms’ organic wastes to renewable natural gas.

A former chief administrative officer for Dairy Farmers of Ontario and CEO for Career Colleges Ontario, Jain “brings extensive experience in strategic and operational planning and is recognized as a trusted and collaborative leader,” the federal government said in a release.

“There is no doubt that Shikha Jain’s extensive experience in strategic planning and sustainability in the dairy industry will be assets for the Canadian Dairy Commission,” Bibeau said in the same release.

“Her guidance will be valuable as the CDC is moving forward with the government’s agenda to advance innovation and (greenhouse gas) emissions reduction.”

The commission is tasked with co-ordinating federal and provincial dairy policies; it administers support prices for butter and skin milk powder and the national marketing quota.

Jain’s appointment fills the vacancy on the CDC’s three-member board of directors, after the appointment of Benoit Basillais as the commission’s new CEO this summer and former commissioner Jennifer Hayes as CDC chair late last year.

CDC governance was flagged in a special report from the federal auditor general’s office in March last year, calling on the commission’s board to keep in touch with the ag minister’s office on a “timely basis” to make sure its board table is fully occupied.

That report found no board meetings had to be cancelled or any decisions left unresolved, but nevertheless, having an empty chair at a three-member board table “poses a significant risk that the board would be unable to make decisions and operate effectively,” the auditor general’s office said at the time.

That poses a risk particularly for the CDC. Its requirement for members to have “significant dairy industry experience” — with one member also serving as CEO — makes it somewhat more likely that a “real, potential or perceived” conflict of interest could pop up, requiring at least one member to abstain from voting on certain decisions. — Glacier FarmMedia Network

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Canada has not been as hard hit by the shortage caused by the suspension at the Abbott facility, Retail Council of Canada spokesperson Michelle Wasylyshen told Reuters.

The United States has been grappling with a widespread infant formula shortage since top U.S. maker Abbott issued a recall in February after reports of bacterial infections. Read full story

Many Canadian stores stock products from other suppliers but supply has been an issue for various reasons since mid-2021, Wasylyshen said. She could not say how many stores, facing shortages, have imposed limits or when the limits started.

She urged against panic buying, especially formulas for babies with allergies that are badly needed and in particularly short supply. “There’s enough to go around for everyone.”

The vast majority of Canada’s baby formula is imported, said Sylvain Charlebois, who studies food distribution and food policy at Dalhousie University.

Chinese-owned manufacturer Canada Royal Milk in Kingston, Ont., exports its products.

Human resources manager Carey Bidtnes told Reuters production for the Canadian market was part of its business plan but that had been delayed due to the coronavirus pandemic.

She said Canada Royal Milk will complete its submission to Health Canada to sell its products domestically by the end of the month.

Health Canada did not immediately return requests for comment Wednesday.

New manufacture of baby formula in Canada may be a hard sell economically “because that market is shrinking: Birth rates are getting lower… That’s why there’s been a lot of consolidation.”

Earlier this month, Canada issued an interim order allowing for the importation of 20 baby formula products from Germany, Ireland, the U.S. and the United Kingdom.

Restarting production at the Abbott facility could help, although Canadians may not see that relief for at least two months, Wasylyshen said, adding retailers are bracing for further potential formula shortages due to shortages of key ingredients such as sunflower oil thanks to the Ukraine crisis.

She has heard reports of Americans heading north to buy formula but has not verified them.

— Reporting for Reuters by Anna Mehler Paperny.

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FDA commissioner Robert Califf provided no details, but President Joe Biden said last week he was working to allow more formula to come in from other countries.

Empty or low-stock shelves stem partly from a February recall of powdered formula and a plant closure by one of the nation’s main manufacturers, Abbott Laboratories, after four babies who had been fed formula made there became ill from Cronobacter sakazakii infections.

Abbott took a step to reopen the plant on Monday, saying it had agreed with the FDA on the steps needed to resume production there. The company said it would restart the plant within two weeks after the FDA confirms it has met the requirements.

The shortage of Abbott’s skim milk-based formula has been compounded by supply-chain snags and historic inflation, leaving about 40 per cent of baby formula products out of stock nationwide, data shows.

Califf told NBC News he does not expect the shortage of the critical baby product to last until the end of year, adding on CNN that he expects the situation to gradually improve.

The White House separately said it was continuing talks with the major formula manufacturers to identify logistical hurdles and provide any transportation support that could help them and major retailers get formula to where it is needed.

“This is principally an issue of production more than goods movement,” Transportation Secretary Pete Buttigieg told reporters at a White House briefing.

Abbott said in a statement on Monday that after investigations by the FDA, Centers for Disease Control and Prevention (CDC) and Abbott, there is no conclusive evidence to link Abbott’s formulas to these infant illnesses.

“We have been working to address the FDA’s observations so we can restart operations,” the company said in a statement on Monday.

Abbott has shipped to the U.S. millions of cans of formula from its FDA-approved Ireland facility.

As far as efforts to bring in baby formula from other countries that the FDA deems safe for import, Califf said: “I expect by the end of the day today that we’re likely to have an announcement about that path forward.”

Representatives for the health agency did not respond to a request seeking more details on the plan.

White House National Economic Council director Brian Deese told reporters he expected the FDA to issue import guidance as soon as Monday.

A White House official earlier said the government has offered transportation and logistics support to Abbott as well as Reckitt Benckiser, Nestle and Perrigo, in addition to top retailers such as Target, Amazon and Walmart.

Congress this week also plans to address infant formula rules regarding the Women, Infants and Children program, a federal assistance nutrition program administered by U.S. states, as well as emergency funding to shore up supplies.

— Reporting for Reuters by Susan Heavey, Jeff Mason and Trevor Hunnicutt; additional reporting by David Shepardson, Caroline Humer and Leroy Leo.

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The U.S. is working with manufacturers to allow more importation of baby formula, Biden told reporters in the Rose Garden. “We’re going to be, in a matter of weeks or less, getting significantly more formula on shelves,” he said.

Food and Drug Administration (FDA) commissioner Dr. Robert Califf said earlier Friday the FDA will announce plans next week detailing how manufacturers and suppliers abroad will be able to import their products into the United States, as well as new options for U.S. companies.

The FDA is aiming for a streamlined process that will get more products on U.S. shelves while meeting safety, quality and labeling standards, Carliff said. The US$4 billion annual U.S. baby formula market is dominated by domestic producers, with imports limited and subject to high tariffs .

“Our data indicates that in stock rates in retail stores are stabilizing but we continue to work around the clock to further increase availability,” Carliff said on Twitter.

The Biden administration this week has come under increasing pressure to address the problem, which has roots in a February recall of some formulas by one of the nation’s main manufacturers, Abbott Laboratories.

U.S. agencies have been investigating bacterial infections caused by the infant formula manufactured at Abbott’s Sturgis facility in Michigan.

The U.S. Centers for Disease Control and Prevention (CDC) has now closed its investigation on Abbott’s formula, with no additional cases of infections, according to a notice posted Friday on the FDA website.

According to Health Canada, which oversaw a parallel recall of Abbott formula in the Canadian market, the recalls were based on the potential risk of contamination with salmonella and Cronobacter sakazakii. The latter is “not commonly linked to human illness (but) in rare cases it can cause serious or fatal infections.”

Many U.S. parents rely on baby formula. Fewer than half of babies born in the United States were exclusively breast-fed through their first three months, according to the Centers for Disease Control and Prevention 2020 Breastfeeding Report Card.

Abbott’s recall affected formulas, including certain Similac products, made at a Michigan plant after complaints about bacterial infections in infants who had consumed the products.

The shortages have been compounded by supply-chain snags and historic inflation, leaving about 40 per cent of baby formula products out of stock nationwide, data firm Datasembly said.

Biden met on Thursday with executives from infant formula manufacturers and retailers, pressing them to do everything possible to get families access.

Retailers said their top ask is more flexibility on the types of formula they can sell, while consumers need more flexibility on the types they can buy, particularly through the ‘WIC’ program for low-income families, the White House said.

The nutrition program for Women, Infants and Children is a federal assistance scheme administered by U.S. states. Biden told reporters retailers such as Walmart were also looking for flexibility about the amounts of formula WIC users could buy.

Abbott said on Friday it has shipped millions of cans of infant formula powder into the United States from its Ireland facility, particularly to serve consumers who use the WIC program for low-income families.

In states where Abbott has the WIC contract, the company said it will pay rebates on competing products if Similac is not available through August.

About half of infant formula nationwide is purchased by participants using WIC benefits, the White House said, and rules set by individual states have a big effect on the availability and distribution of infant formula.

“The shortage has taken an especially dangerous toll on women and children from underserved communities,” U.S. House Speaker Nancy Pelosi said.

The House of Representatives next week will bring up a bill to grant emergency authority to the WIC program to address supply-chain disruptions and recalls by relaxing non-safety-related regulations, she said in a statement on Friday.

Pelosi also said an emergency spending bill to address the infant formula shortage would advance in the House.

In other measures on Capitol Hill, the House Oversight Committee said it plans to investigate the four largest manufacturers of baby formula and seek answers on how to ramp up production and avoid any future shortage.

The committee said on Friday it sent letters seeking information to Abbott Nutrition, Mead Johnson Nutrition, Nestle and Perrigo.

The shortage poses a threat to families throughout the country, the letter said, “particularly those with less income who have historically experienced health in equities.”

Two other House committees — Energy and Commerce, and Appropriations — planned hearings on the issue.

— Reporting for Reuters by Doina Chiacu, Susan Heavey, Jeff Mason and Richard Cowan in Washington and Ankur Banerjee and Leroy Leo in Bangalore. Includes files from Glacier FarmMedia Network staff.

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Canada cannot expect to have both a protected system and compete globally, U.S. Dairy Export Council CEO Tom Vilsack said in an interview.

“They have decided to go significantly into the export market by undercutting the world price for milk powder,” said Vilsack, who was U.S. agriculture secretary under former President Barack Obama.

Canadian exports of skim milk powder more than tripled to 71,880 tonnes in 2017 from a year earlier, worth $173 million, according to Statistics Canada data. Still, Canada accounts for less than three per cent of global trade, according to Agri-Food Economic Systems.

Canada controls dairy supplies and prices and limits imports through high tariffs and has been long criticized by dairy-producing countries such as the U.S. and New Zealand. It recently become the main target of Trump’s verbal attacks on Canada amid talks toward a new trade agreement.

Dairy farmers have an outsized influence in Canadian politics, as they are concentrated in the vote-rich provinces of Ontario and Quebec.

Their main lobby group, Dairy Farmers of Canada (DFC), met privately with Prime Minister Justin Trudeau on Tuesday and left feeling comforted.

“He clearly understands our concerns. He stated that not only does he support supply management, he is also committed to our dairy farmers, and a robust dairy sector,” said DFC president Pierre Lampron.

Faced with fast-rising volumes of U.S. milk proteins not subject to high tariffs into Canada, Canadian processors and farmers implemented a new pricing system, called Class 7, for milk ingredients starting in 2016.

The new class allowed processors to produce skim milk powder at a low enough price to compete globally.

“They are essentially transferring the problems that are created by their system,” Vilsack said.

The underlying reason for Canada’s new price class is that demand for butterfat, used to make butter and cream, is outpacing that of dairy proteins – leaving processors with surpluses of the latter.

Mathieu Frigon, chief executive of the Dairy Processors Association of Canada, whose members include Saputo and Parmalat Canada, said he was surprised by the U.S. complaints.

“If we talk about contradiction, the U.S. faces the same issue,” Frigon said, adding the U.S. also limited dairy imports with high tariffs, albeit much lower than Canada’s. “It’s not like their market is wide open.”

The U.S. ships five times more dairy to Canada than vice-versa, Frigon said.

U.S. concerns about Class 7 are overblown, said Al Mussell, research lead at Canadian think tank Agri-Food Economic Systems.

Canadian sales are “a drop in the bucket,” and while skim milk exports grew fast, that growth cannot continue because Canada’s system restricts production, Mussell said.

— Reporting for Reuters by Rod Nickel in Winnipeg and Julie Ingwersen in Chicago.

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Canada cannot expect to have both a protected system and compete globally, U.S. Dairy Export Council CEO Tom Vilsack said in an interview.

“They have decided to go significantly into the export market by undercutting the world price for milk powder,” said Vilsack, who was U.S. agriculture secretary under former President Barack Obama.

Canadian exports of skim milk powder more than tripled to 71,880 tonnes in 2017 from a year earlier, worth $173 million, according to Statistics Canada data. Still, Canada accounts for less than three per cent of global trade, according to Agri-Food Economic Systems.

Canada controls dairy supplies and prices and limits imports through high tariffs and has been long criticized by dairy-producing countries such as the U.S. and New Zealand. It recently become the main target of Trump’s verbal attacks on Canada amid talks toward a new trade agreement.

Dairy farmers have an outsized influence in Canadian politics, as they are concentrated in the vote-rich provinces of Ontario and Quebec.

Their main lobby group, Dairy Farmers of Canada (DFC), met privately with Prime Minister Justin Trudeau on Tuesday and left feeling comforted.

“He clearly understands our concerns. He stated that not only does he support supply management, he is also committed to our dairy farmers, and a robust dairy sector,” said DFC president Pierre Lampron.

Faced with fast-rising volumes of U.S. milk proteins not subject to high tariffs into Canada, Canadian processors and farmers implemented a new pricing system, called Class 7, for milk ingredients starting in 2016.

The new class allowed processors to produce skim milk powder at a low enough price to compete globally.

“They are essentially transferring the problems that are created by their system,” Vilsack said.

The underlying reason for Canada’s new price class is that demand for butterfat, used to make butter and cream, is outpacing that of dairy proteins – leaving processors with surpluses of the latter.

Mathieu Frigon, chief executive of the Dairy Processors Association of Canada, whose members include Saputo and Parmalat Canada, said he was surprised by the U.S. complaints.

“If we talk about contradiction, the U.S. faces the same issue,” Frigon said, adding the U.S. also limited dairy imports with high tariffs, albeit much lower than Canada’s. “It’s not like their market is wide open.”

The U.S. ships five times more dairy to Canada than vice-versa, Frigon said.

U.S. concerns about Class 7 are overblown, said Al Mussell, research lead at Canadian think tank Agri-Food Economic Systems

Canadian sales are “a drop in the bucket,” and while skim milk exports grew fast, that growth cannot continue because Canada’s system restricts production, Mussell said.

— Reporting for Reuters by Rod Nickel in Winnipeg and Julie Ingwersen in Chicago.

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It will also be implemented quickly, on July 1.

The five provinces — Prince Edward Island, New Brunswick, Nova Scotia, Quebec and Ontario — create quota policy collectively, referred to as P5.

According to Kristin Benke, economist with Dairy Farmers of Ontario, between August 2016 and July 2017, there has been an increase of 12 per cent in quota issued by the P5, including one per cent in August, one per cent in September, three per cent in November, two per cent in December and now five per cent in July.

According to a statement from Dairy Farmers of Ontario and the P5, the increase is needed as there still isn’t enough milk produced to fill the market for butter.

“This decision is intended to ensure P5 milk production continues to fill all current demand, as butter stocks have not surpassed their updated target level of 35,000 tonnes.

“Demand for dairy products continues to be strong while P5 processing capacity has increased since the beginning of April but continues to be closely monitored.”

As butter demand has increased, there’s been an increasing amount of skim milk left, after the butter fat has been removed to make butter and other products.

Without adequate processing for that skim milk, it has become a waste product, sold to feed markets or disposed of.

Increasing investment in processing should take care of some of that excess skim milk powder with the creation of protein isolates.

A new class of milk in Ontario was implemented last spring, called Class 6. It lowered the price of milk to be used to make milk protein isolates in order to compete with imported American milk protein isolate products.

The rest of the country has since followed suit in creating similar pricing, called Class 7, but it is still under discussion.

— John Greig is a field editor for Glacier FarmMedia based at Ailsa Craig, Ont. Follow him at @jgreig on Twitter.

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The strategy is meant to create a lower-priced class of milk, Class 7, to encourage the use of skim milk powder in further-processed ingredients.

Ontario has already independently implemented such a strategy with its Class 6, causing consternation in the rest of the country, but likely gave a push to an agreement in principle reached last summer.

“There are still details to be worked on,” said Therese Beaulieu, assistant director of policy communications with Dairy Farmers of Canada. “The agreement in principle still stands. The timelines depend on how much time everybody needs to make changes.”

An agreement among 10 provinces, all with jurisdiction in agriculture, and their dairy boards, along with the federal government, can take a while to hammer out, she noted. No new deadline has been set.

Delays in getting agreements in place have hamstrung the supply management system and are in part what has led to a lack of investment in skim milk drying capacity and further-processing of milk ingredients by Ontario processors.

That’s why the Ontario initiative, and the national agreement in principle, have been lauded as ground-breaking.

It’s also why there’s significant desire in the country to get the agreement finished, despite some concerns in some parts of the country about trade retaliation.

“The West was pretty excited about it and excited about Feb. 1,” says Beaulieu.

Increasing popularity of dairy products derived from milk fat, such as cream, butter and ice cream, created the surplus in skim milk — and without the drying capacity to process the skim milk to something deemed valuable by the marketplace, by mid-2015 significant volumes of skim milk were being dumped on fields and in manure pits.

The ingredients strategy is an attempt to create a template for doing business in the future for supply management.

“It’s a solution, maybe, to the surplus protein that we have. There are lots of opportunities,” Beaulieu said. “If you look at the food trends for 2017, protein is right there. Dairy protein is very high quality.”

The U.S. dairy sector has the ingredients strategy in its sights, however, and it formed a significant part of a letter the dairy industry sent to U.S. President Donald Trump recently, calling the strategy an affront to Canada’s trade obligations and a barrier to trade.

The Canadian dairy industry maintains it is providing an alternative and competitive option for Canadian dairy processors to imported U.S. product. Processors are under no obligation to buy Canadian skim milk or powder, as milk proteins enter the country free of tariffs.

Canadian processors, have, however, committed in the past eight months to invest hundreds of millions of dollars into upgraded dairy ingredient processing and research.

— John Greig is a field editor for Glacier FarmMedia based at Ailsa Craig, Ont. Follow him at @jgreig on Twitter.

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A letter to producers last Friday from Dairy Farmers of Ontario board chairman Ralph Dietrich, intended to “put to rest the rumour” that DFO was being forced to dump raw milk, instead wound up as a lead story this week at the Globe and Mail as it detailed the circumstances leading to skim milk dumping.

DFO, in a separate release Monday, emphasized the product being dumped is a livestock feed-grade byproduct of the demand for butterfat and “if there was excess product to feed people in need, we would provide it.”

Total dairy demand has been strong “for the better part of two years,” Dietrich wrote in last Friday’s letter to farmers, but most of that growth has been in products such as butter, creams, cheese and yogurt.

“The weakest segment of the market is fluid milk, although the trend to lower-butterfat milk seems to have been reversed.”

The result has been “unprecedented” growth in all-milk quota, by 6.5 per cent in just over a year, and “the issuance of incentive days,” said Dietrich, who farms at Mildmay, about 90 km northwest of Guelph.

However, he wrote, “we are currently testing the limits of system capacity, with the limiting factor being the amount of skim milk that can be dried into skim milk powder.”

DFO’s board, he said, has thus been “challenged to market all the milk every day.” However, he added, some plants are able to separate the milk without generating more powder.

Thus, he said, “there have been days in the last couple of weeks when we have had to dispose of skim milk in lagoons… That is obviously not an ideal situation but better than the alternative. There is still a need to make more butter and I don’t see that changing.”

The Globe’s Barrie McKenna on Friday quoted DFO’s communications director Graham Lloyd as saying Ontario farmers have produced 5.4 million litres of excess skim in the past month, and roughly 800,000 litres — worth about $500,000 as livestock feed — have instead gone into farm lagoons since late May.

A “similar situation exists in all parts of the country,” Dietrich said in his letter, noting “there have been days when Ontario has been able to move some milk into Quebec and some days when Ontario has been able to help Quebec.”

Today, however, “we continue to be challenged on a daily basis and there is no obvious end in sight, unless the normal seasonal production trend kicks in or there is a prolonged hot spell.”

Dairy Farmers of Manitoba chairman David Wiens, for another example, told the Manitoba Co-operator’s Shannon VanRaes last month that the province’s dairy sector, strained by both increased demand for dairy and limited processing capacity, has had to ship 75,000 lites of milk west each day.

Part of the challenge was dairy giant Saputo’s move to shut its processing plant in Winkler, while expansions at the company’s Brandon site have faced delays, Wiens said.

Saskatoon processors who’ve handled the Manitoba surplus are now themselves at capacity, he added, leading to a situation where “potentially milk will cascade throughout the provinces right through to Abbotsford (B.C.).”

McKenna on Friday also quoted an internal DFO report, which warned of rising imports of “designer” milk protein ingredients from the U.S. and elsewhere, replacing fluid milk in the making of cheese, yogurt and other goods.

“If milk protein imports continue to grow, the industry will no longer be able to sustain itself as there will be no market for the (skim)… leaving the industry no choice but to dump skim milk or import more butter.”

Critics quoted by the Globe blamed Canada’s supply-managed dairy system for producing such surpluses, but DFO emphasized in its release Friday farmers “are producing the right quantity of milk” for Canada’s needs and suggestions to the contrary are “simply not accurate.”

International dairy values have also fallen in recent months, with average milk powder selling prices dropping Tuesday to US$2,409 per tonne, their lowest level since August 2009, Reuters reported.

“It will become harder for prices to recover as the volume of milk powder on offer increases as the new dairy season progresses,” analysts for New Zealand-based AgriHQ said in a note Reuters quoted Wednesday. — AGCanada.com Network

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