Canada and Supply Management for Dairy

One of the biggest issues in the renegotiation of NAFTA with Canada is their desire to maintain their system of supply management for dairy.  Here's a site with statistical data on the industry.  The two big provinces are Ontario and Quebec.  As one can see from this chart there's little variation in cow numbers over the last 15 years (2004-2018).  But if you look at the number of farms, there has been roughly 1/3 reduction in farm numbers over the same period (17,000 to 11,000).

From ERS  (the copy and paste process loses the formating.  I've bolded the two big points): Midpoints increased for each commodity over 1987-2012, but the rate of increase varies widely, with dramatic long-term changes in egg, hog, and dairy production (table 9). The midpoint flock size in egg layers increased to 925,975 birds in 2012 from 117,839 in 1987 (and just over 62,000 in 1982); the midpoint for hog removals rose to 40,000 in 2012 from 1,200 in 1987; and the midpoint dairy cow herd rose to 900 cows in 2012 from 80 in 1987. The broiler and fed cattle industries show continued consolidation, with 2012 midpoints a bit more than double their values in 1987. However, each underwent striking changes in organization and technology well before the series starts in 1987 (MacDonald and McBride, 2009). Table 9 Consolidation in livestock sectors, 1987-2012 Commodity 1987 1997 2007 2012 Change (percent) 1987-2012 2007-2012 Sales midpoint: Number of head sold or removed Broilers 300,000 480,000 681,600 680,000 127 -0.1 Fed cattle 17,532 38,000 35,000 38,369 119 10 Hogs and pigs 1,200 11,000 30,000 40,000 3,233 33 Turkeys 120,000 137,246 157,000 160,000 33 2 Inventory midpoint: Number of head in herd/flock Beef cows 89 100 110 110 24 0 Egg layers 117,839 300,000 872,500 925,975 686 6 Milk cows 80 140 570 900 1,025 58 Source: USDA, Economic Research Service, compiled from census of agriculture data.

Bottom line: while Canadian dairy farms have declined in number, the rate of decline in the US is higher. 

I'm reminded of the supply management system the US used to have for tobacco, now ended.  It had a similar effect: slowing the transformation of the industry.