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Product Quality in the Canadian Dairy Industry

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  • Nogueira, Lia
  • Baylis, Katherine R.

Abstract

Supply management has been shown to increase the price of milk. Technological change has induced (and allowed) processors to substitute alternative inputs, many of which can be imported tariff-free, for the traditional ingredients to lower costs and maximize profit. Meanwhile, there has been a great deal of consolidation in the dairy processing industry. We analyse the effect of these trends on cheese quality by measuring the increase in casein imports. Results suggest that supply management is negatively affecting cheese quality, by increasing casein imports due to the higher milk price. Furthermore, we were able to calculate that approximately 9.8% of specialty cheese is produced used casein. A 22% ad valorem tariff is needed to drive casein imports down to zero.

Suggested Citation

  • Nogueira, Lia & Baylis, Katherine R., 2004. "Product Quality in the Canadian Dairy Industry," Annual Meeting, 2004, June 20-23, Halifax, Nova Scotia 34201, Canadian Agricultural Economics Society.
    • Handle: RePEc:ags:caes04:34201
    DOI: 10.22004/ag.econ.34201
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    References listed on IDEAS

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    1. Timothy J. Richards & Scott R. Jeffrey, 1997. "The Effect of Supply Management on Herd Size in Alberta Dairy," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(2), pages 555-565.
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    5. Karl Meilke & Rakhal Sarker & Danny Roy, 1998. "The Potential for Increased Trade in Milk and Dairy Products between Canada and the United States under Trade Liberalization," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 46(2), pages 149-169, July.
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    9. Timothy J. Richards, 1996. "The Effect of Supply Management on Dairy Productivity," Canadian Journal of Economics, Canadian Economics Association, vol. 29(s1), pages 458-462, April.
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