Quebec dairy farmers make up one of the province’s most important agricultural sectors. Quebec currently has 4,087 dairy farms and more than 9,281 dairy producers. Together, these farms market about 3.60 billion litres of milk each year.
Quebec’s dairy sector also has a distinctive structure. Farmers do not individually negotiate the sale of their milk with processors. They market it collectively through Les Producteurs de lait du Québec under supply management and the province’s joint marketing plan.
This page explains how Quebec’s dairy sector works, the role of the PLQ, collective marketing, quota, the P5 pool, milk processing and the main challenges facing farms.
Who are Les Producteurs de lait du Québec?
Les Producteurs de lait du Québec, or PLQ, is the organization representing the province’s dairy producers. Founded in 1983, it now brings together more than 9,281 producers on 4,087 dairy farms.
The PLQ is neither a government ministry nor a processor. It is a producer organization responsible for representation, negotiating conditions of milk sales, administering collective marketing and providing services related to production.
At the national level, Quebec producers are also represented by Dairy Farmers of Canada, which is more involved in federal policy, national promotion and trade negotiations.
How many dairy farms are there in Quebec?
According to PLQ data, Quebec currently has 4,087 dairy farms. They produce about 3.60 billion litres of milk and generate about $3.61 billion in milk sales.
The average Quebec dairy farm has about 82 cows, making herds relatively modest compared with many regions of the western United States where farms with hundreds or thousands of cows are common.
Quebec remains Canada’s leading dairy province by number of farms and one of the largest by volume. The PLQ estimates that Quebec accounts for about 36% of Canadian dairy farm cash receipts.
Why is milk marketed collectively?
One of Quebec’s defining features is collective marketing. Farmers do not individually sell their milk to Saputo, Agropur, Lactalis or other processors.
The province’s dairy farms market their milk collectively through the joint plan administered by the PLQ. Farmers have delegated to the organization the mandate to negotiate terms of sale with processors.
The PLQ negotiates marketing agreements, plant-supply rules, certain quality conditions and payment terms. This gives farmers bargaining power that an individual farm would have difficulty exercising against very large food companies.
How does milk pricing work in Quebec?
The farm price is not a single uniform amount for every litre delivered.
Milk is valued according to its components, mainly butterfat, protein and other solids, and its value also depends on its end use. Milk used for fluid consumption, cheese, butter or industrial ingredients does not necessarily have the same value.
Revenues from these markets are pooled according to applicable rules. A producer’s payment therefore reflects both milk composition and the value of the markets served.
The role of the P5
Quebec does not operate alone. It is part of the Eastern Canadian Milk Pool, known as the P5, with Ontario, New Brunswick, Nova Scotia and Prince Edward Island.
According to the Canadian Dairy Commission, these five provinces pool revenues from fluid and industrial milk as well as certain costs such as transportation and market access.
The P5 also harmonizes several parts of the system, including component prices and some aspects of quota management. For a Quebec producer, that means part of the risk associated with different markets is shared across participating provinces.
How does dairy quota work in Quebec?
As elsewhere in Canada, Quebec dairy production operates under supply management. Each farm holds quota that determines its production capacity.
The total amount of milk Canada seeks to produce is adjusted to demand and then allocated among provinces and farms.
Quota prevents farms from expanding production without regard to overall demand, but it also represents an important and costly asset.
For a fuller explanation of the system, see Supply Management in Canada.
What happens to milk produced in Quebec?
After milking, milk is cooled on the farm and collected by tanker truck before being delivered to a processing plant.
Quebec currently has 117 dairy processing plants, including about 60 artisan facilities, according to the PLQ.
Quebec milk is used to make fluid milk, cheese, butter, cream, yogurt, milk powder and various ingredients for the food industry.
How important is the sector economically?
The dairy supply chain is a major part of Quebec’s agricultural economy.
The PLQ estimates that the dairy industry supports about 65,998 jobs, contributes roughly $6.12 billion to GDP and generates about $1.03 billion in tax revenues.
Dairy farming also supports economic activity throughout rural Quebec through purchases of feed, machinery, veterinary care, equipment, fuel and professional services.
Production standards
Like all Canadian dairy farms, Quebec farms must comply with the national proAction program.
The mandatory program covers milk quality, food safety, animal care, traceability, biosecurity and the environment. Producers must also meet strict rules on milk storage temperature, bacterial quality, veterinary drugs and withdrawal periods.
Does Quebec export much milk directly?
Most milk produced in Quebec is destined for the Canadian market. Some is transformed into products or ingredients that are later exported.
International trade negotiations therefore matter even when a farm itself exports nothing. New foreign access to the Canadian market can reduce the domestic market available for Canadian milk.
What are the main challenges facing Quebec dairy farmers?
The stability provided by supply management does not eliminate farm-level economic pressures.
Farmers face high land, building and quota costs, rising equipment prices, labour shortages, interest rates, environmental requirements and major investments required to modernize barns.
Farm transfer to a new generation is another major challenge. High asset values can make succession financing difficult even when the underlying operation remains viable.
At the same time, farms are increasingly investing in milking robots, automation, data collection, genetics, forage improvement and digital management tools.
Why is Quebec so central to the supply-management debate?
Because Quebec has the highest concentration of dairy farms in Canada. Any major change to supply management or market access therefore affects the province particularly strongly.
When Canada negotiates new trade agreements or discusses greater agricultural market access with the United States, Quebec dairy farmers are often among the first directly affected.
Key takeaways
Les Producteurs de lait du Québec represents more than 9,281 producers operating 4,087 dairy farms. Together, these farms market about 3.60 billion litres of milk each year.
The sector relies on supply management, but also on collective marketing. Farmers sell milk collectively, share part of their revenues through the P5 and negotiate conditions of sale through the PLQ.
Understanding Quebec’s dairy sector therefore requires looking at farms, quota, the PLQ, processors, the P5 and trade negotiations together.