Dairy industry eyes post-COVID rebound as restaurants, other commercial customers reopen

With more people spending time at home, consumer sales have helped support $1.5B eastern Ontario industry amid pandemic
Cows

One of eastern Ontario’s most prominent milk producers believes the dairy industry will continue to weather the overall downturn as COVID-19 gradually fades from the farm scene.

The largest agricultural sector both in eastern Ontario and across the province – and one of the largest industries of any type – the Ontario dairy business took a hit after COVID-19 came on gangbusters last year, causing commercial sales to dry up almost overnight, said John Wynands, who milks 250 Holsteins with family members in Grenville County, north of Cardinal.

“Restaurants, institutions and other commercial customers were forced to cease deliveries,” Wynands recalled during an on-farm chat. “That left us with a surplus in the system, much of which we donated to food banks. But we had to dump some milk, which no dairy farmer wants to do.”

While commercial sales declined, residential business increased during the pandemic, allowing producers to hold their own, said Wynands, whose parents started the same farm he now runs after arriving from Holland in 1952.

“With people working from home and schools closed, our residential sales picked up,” he said. “As many people get back to their previous routines, we think the commercial stream will build up again.”

Million-dollar enterprises

Like most dairy farms, the Wynands farm is a multimillion-dollar enterprise carrying a huge debt load. Gross revenues are $2.7 million a year; expenses are $65,000 a month. There are 10 full and part-time staff not including John and his wife, Dawn. 

John Wynands in his rotary milking parlour.
John Wynands in his rotary milking parlour. (Photo by Tom Van Dusen)

The lifelong dairyman represents Region 3, which includes Frontenac, Renfrew, Leeds, Grenville and Lanark on the producer-operated Dairy Farmers of Ontario board of directors.

In the five counties represented by Wynands on DFO, annual production is about 154 million litres, representing a contribution to the economy of more than $350 million. When the other eastern counties are added in, total production is close to 647 million litres and total economic contribution is close to $1.5 billion.

Creation of a producer marketing cooperative, collecting milk to sell to processors, dates back to 1965.

Under the controversial milk marketing system, or supply management, dairy farmers must hold quota – basically a license to own a certain number of active cows and produce a set amount of milk. Quota is intended to match supply with expected domestic demand, preventing market gluts as well as ensuring stable prices and predictable returns.

Currently capped at $24,000 per working cow, quota is bought and sold and has often been cited as contributing to higher consumer prices as well as one of the main reasons it’s so financially difficult for people outside established farm families to enter the dairy business.