• Fluid Milk
• Figure 1. Per Capita Consumption of Fluid Milk in Canada
• Dairy Products
• Figure 2. Per Capita Consumption of Dairy Products

• Canadian Dairy Trade Balance
• Figure 3. Canadian Dairy Trade Balance (millions of dollars)
• Exports
• Figure 4. Canadian Exports of Dairy Products
• Imports
• Figure 5. Canadian Imports of Dairy Products

CONSUMPTION OF DAIRY PRODUCTS¹

Social and demographic changes influence the needs, tastes and spending habits of consumers. Because of their large numbers, Canadian baby boomers have an enormous impact on consumer trends. As they age, baby boomers are becoming more and more interested in, and informed about, nutrition. They expect the foods they eat to have certain health benefits.

Canadian consumption patterns are also influenced by immigration. The influx of immigrants has exceeded natural population growth for the last ten years or more. A more diverse population demands more diversity in food products. The Atlantic Provinces are less affected by this diversification because of the traditional origins (Europe and United States) of most of their immigrants. Ontario, Quebec and the Western provinces are already innovating in terms of the variety of dairy products they offer. For example, kefir (a fermented milk beverage from Eastern Europe) has been marketed since the early 1990s in several large Canadian cities, especially in Quebec.

In addition, the demand for ready-to-eat and high value-added foods has risen as a result of the growing number of one-person households, smaller families, and the increased presence of women in the labour market.

The industry also influences demand by offering innovations to consumers such as filtered milk, various types of packaging, and existing products presented as health foods.

Consumers have several dairy products to choose from to meet their needs. Over the last twenty years, numerous specialty cheeses, dairy desserts, yogurts and yogurt drinks, gourmet ice cream and ice cream novelties have been added to staples such as milk, cream, butter and cheddar cheese.

Fluid Milk

There are four major types of fluid milk: homogenized (3.25% butterfat), partly skimmed (2%), low fat milk (1%), and skim milk (which has less than 0.5% butterfat). A smaller market also exists for other fluid milk products such as flavoured and lactose-free milk. Creams are marketed with butterfat contents ranging from 10% for coffee cream, to 35% for whipping cream.

Fluid milk sales between 2000 and 2004 increased by a little less than 1% from 27.18 to 27.41 million hectolitres. In the last 10 years, part of the consumption of fluid milk has shifted to 1% milk. Consumption of chocolate milk on the other hand has increased significantly over the same period reaching 5.4 litres per person. Cream has also experienced a significant rise in consumption from 4.26 litres in 1990 to 6.91 litres per capita in 2004. This is explained by the increase in sales of both 10% and 18% cream which are most frequently added to coffee or used in specialty coffee products.

Figure 1. Per Capita Consumption of Fluid Milk in Canada (in litres)

Source: Statistics Canada

In the future, the development of new milk products including flavoured milk beverages beyond the traditional chocolate milk, functional milks with added vitamins or enriched with calcium and omega-3 fatty acids, will also have an impact on consumer demand for fluid milk.

Dairy Products

Canadians have their dairy paradox. While consumers demand low fat for products they consume on a regular basis, low fat is the least of their concerns for products they consume only occasionally. Both specialty cheeses and deluxe ice creams greatly benefit from this paradox. Some manufacturers have gone even further by offering high-fat yogurts.

Figure 2. Per Capita Consumption of Dairy Products

INTERNATIONAL TRADE

Canadian Dairy Trade Balance

There was a deficit of $323.8 million in the Canadian dairy trade balance in 2004, which represents an increase in the deficit of 38.9% over the previous year.

Figure 3. Canadian Dairy Trade Balance (millions of dollars)

Source: Statistics Canada, May 2005

Exports

The main dairy products exported by Canada in 2004 were cheeses (28.9%), followed by dairy spreads (18.3%) and skim milk powder (14.9%)⁴. The main export markets for Canadian dairy products were the United States (48.1%), the European Union (12.2%) and South Korea (6.0%). Between 2001 and 2004, Canadian dairy exports to Mexico fell by 91.8% and Mexico went from being the second to the fourth leading destination for dairy exports, owing to a steady decline in exports of skim milk powder to that country in recent years.

Figure 4. Canadian Exports of Dairy Products

Source: Statistics Canada; calculations by the Dairy Section,
Agriculture and Agri-Food Canada

Over the past year, the Canadian dairy products with the sharpest rises in quantities exported were dairy spreads (+5.1 million kilograms), whole milk powder (+1.4 million kilograms), ice cream (+0.4 million kilograms) and specialty cheese (+0.3 million kilograms).

In relative terms, the largest growth in the past year in Canadian dairy exports was in whole milk powder (+490%), casein and casein products (+147%), dairy spreads (+44%), condensed milk (+46.6%) and yogurt (+31.4%).

Of the products listed above, yogurt is the only Canadian dairy product that has had uninterrupted growth in exports over the past four years. Canadian exports of liquid yogurt to the United States are not subject to tariff rate quotas or tariffs. However, powdered yogurt is subject to a tariff rate quota of 4,105,000 kilograms.

Imports

Canadian dairy imports increased by 7.4% over the past year, to $588.1 million. In terms of quantity, imports totalled 184.9 million kilograms, up 5.2% over 2003. Canada's main dairy suppliers are the EU-25 (41.2%), the United States (24.3%), New Zealand (24.1%), Switzerland (4%) and Australia (1.7%).

Among the EU-25, Canada's main suppliers are Germany, France and Italy, which together account for 63% of imports from the EU-25.

In terms of quantity, the following imports grew substantially in 2004: whey products (+9.3 million kilograms), butter and other milk fats (+7.4 million kilograms), whole milk powder (+1.7 million kilograms), cream (+1.2 million kilograms) and products consisting of natural milk constituents (+1.0 million kilograms). Between 2003 and 2004, imports of specialty cheese, fresh cheese, ice cream, evaporated and condensed milk, skim milk powder and dairy spreads also increased.

Figure 5. Canadian Imports of Dairy Products

Source: Statistics Canada

2004 PRODUCTION OF DAIRY PRODUCTS IN CANADA

1. Specific information related to Canadian expenditures for butter, ice cream, cheese, yogurt and milk and cream can be found at http://www.dairyinfo.gc.ca/cdicar.htm
2. Includes cheese used in the making of processed cheese
3. Includes skim milk powder and whey powder
4. In monetary value