The Economics of Milk Production in Alberta

Carlyle Ross

No 346413, 11th Congress, University of Calgary, Canada, July 14-19, 1997 from International Farm Management Association

Abstract: New trade rules within Canada, and between Canada and the USA present many challenges and opportunities for Alberta’s dairy industry. This report is part of a larger study of the competitiveness of Alberta’s dairy industry. It examined the performance of dairy farms in Alberta and compared their performance with other dairy farms in Canada and the USA. Milk production in Canada occurs under strict production and price controls. Such controls make dairy farming in Alberta a stable and profitable business. In 1994, Alberta’s dairy farms earned 15 per cent return on equity and 18 per cent return on capital. Quebec dairy farms reported the highest cost of milk production, followed by Alberta. Alberta dairy farms had a feed and/or labour cost advantage relative to other provinces. Alberta also had a feed cost advantage over dairy farms in the USA. However, milk production costs in the US Pacific region were significantly lower than in Alberta. When more efficient Alberta dairy farms were considered, they had a significant cost advantage over their provincial counterparts, and a small advantage over dairy farms in the Pacific region. The report concluded that Alberta dairy farms were well positioned to take advantage of relaxed interprovincial as well as Canada/US agriculture trade rules.

Keywords: Production; Economics (search for similar items in EconPapers)
Pages: 18
Date: 1997
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Persistent link: https://EconPapers.repec.org/RePEc:ags:ifma97:346413

DOI: 10.22004/ag.econ.346413

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