For dairy producers, milk pooling agreements are a way of managing the financial risks associated with the trends in domestic markets. The Canadian Dairy Commission administers these agreements on behalf of the dairy sector. The pooling of revenues from milk sales enables producers to receive an average price per hectolitre or per kilogram of components, based on total sales.
Comprehensive Agreement on Pooling of Milk Revenues
Under the Special Milk Class Permit Program, industrial milk destined for the manufacture of dairy products and products containing dairy ingredients is sold at competitive prices and these prices vary according to the end use. Through the Comprehensive Agreement on Pooling of Milk Revenues, all dairy farmers across the country share the returns from the sales of special milk classes and markets.
Agreement on Eastern Canadian Milk Pooling (P5 Agreement)
Prince Edward Island, Nova Scotia, New Brunswick, Quebec and Ontario have been working together and sharing revenues under the Agreement on Eastern Canadian Milk Pooling (P5 Agreement). Under this agreement, the provinces share revenues from all milk sales (fluid and industrial), as well as costs for transportation, markets and skim-off. The agreement also provides for the harmonization of other elements such as component pricing, a daily quota system and a coordination function to assist in further harmonization efforts.
The Canadian Dairy Commission chairs the Supervisory Body of the pool, administers the pooling agreement, does the pooling calculations and provides technical expertise and secretariat services to the pool.
Western Milk Pooling Agreement (WMP)
Manitoba, Saskatchewan, Alberta and British Columbia have an all-milk pooling system: the Western Milk Pooling (WMP) Agreement. This agreement provides for the sharing of returns and markets for all milk classes. The existence of this pool allows the four provinces to harmonize their activities, such as milk transportation, milk receiving at plants and milk allocation to plants.
The Canadian Dairy Commission chairs the Coordinating Committee of the WMP, administers the pooling agreement, does the pooling calculations and provides technical expertise and secretariat services to the WMP.