We are encouraged to buy Canadian milk, but why can’t I buy Prince George milk?
BC Milk, the industry-controlled agency that manages our dairy supply system, could do something to change that, if they wanted.
There are a few dairy farms in northern BC: 11 in Smithers alone, one in Vanderhoof, one near Hixon, and a couple near McBride.
But all the milk gets sent to the large processing facilities in the Lower Mainland, put in cartons, and sent back north again.
Most of this production is done by just one giant corporation: Saputo, which likely processes between 60-70 per cent of the milk in BC at just two facilities. Exactly what their market domination is, we don’t know. BC Milk knows what it is to the penny, but they told me they can’t release that information.
As we’ve experienced in recent years, this exposes us to vulnerabilities and food shortages.
When the roads get wiped out or a GMO virus escapes from a lab, our shelves grow bare.
Although BC Milk assures me large-scale centralized processing does not cause milk shortages and that the system is resilient, the fact remains that three times in three years we had empty shelves because we don’t have northern processing.
Worse, when these things happen, the local milk up here has nowhere to go. We have no “plant of last resort.”
It gets dumped down the drain.
You’d think if BC Milk cared about Northern BC, they’d want to help get milk processing established in the north.
But BC Milk, in its quest for “fairness,” in fact discourages progress on this.
Currently, BC Milk’s Cottage Industry Program is a good program that allows dairy producers to process their own milk.
But it only allows producer-processors to process their own milk directly for things like yogurt and cheese, not for fluid milk.
Dairy farms that want to bottle and sell their own milk have to first sell their milk to BC Milk, then buy it back again for 35 per cent more even though the milk doesn’t leave the farm.
This is done to subsidize the cost of milk used for things like higher-profit cheese and powdered milk, products the large processing firms are more likely to produce.
Industry analysts and participants have argued either that this price spread should be eliminated or that the Cottage Industry Program be expanded to include exemptions for fluid milk processing and sales.
Another thing that helps the large plants is that the dairy farmers pay for the costs of centralization—namely, the transportation of milk from farms all over the province to processing plants, mostly in the Lower Mainland.
In 2023, the BC Milk Board spent $31 million hauling milk around — money that comes out of farmers’ pockets and is by far the biggest expense the organization incurs.
A lot of this has to do with complications that arose from the concentration of processing in the 1990s and Saputo’s takeover of the dairy farmer-owned co-operative Dairyland in 2001.
The end result has been the loss of the transportation advantage of on-farm processing.
If Saputo had to pay for the transportation of milk to its facility, decentralizing some of that processing to northern BC would start to make more sense. It would also give a competitive advantage to local northern producer-processors.
But apparently, these kinds of ideas are unfair to Saputo.
As BC Milk director David Janssen said in a Country Life article, favouring small milk processing with preferential pricing is “contrary to the board’s founding principle of fairness for all producers and processors.”
If you asked me, the unfair thing in this situation is that we’ve allowed certain megacorps to achieve such size and economies of scale that the small local processors are practically non-existent, and the ones that exist can barely squeak by.
If you want to know what’s unfair, it’s that we have antitrust regulators in this country who aren’t doing their jobs to protect competition.
Saputo should be broken up, not protected by passive regulators who stand by as the little guys drop like flies.
The neoliberal mindset that obviously holds sway at BC Milk might believe that efficiency is more important than competition and that size is more important than resiliency. But we are at a point in time when we need to ask whether this mindset has got it backwards.
The bigger the tree, the harder it falls, and if we want Prince George to gain some kind of control over its destiny, we will need a new model — not just in dairy, but in all aspects of our economy.
James Steidle is a Prince George writer.
