Editor's Note: As a significant economic force and consumer of forage products, we are pleased to provide regular updates from our many livestock industry partners, including the dairy sector.

A recent study commissioned by the Dairy Farmers of Saskatchewan and conducted by the University of Saskatchewan, profiles the economic contributions of the dairy sector to Saskatchewan's economy.  The dairy sector in this study was defined as a composite of milk production, milk processing and new investments directly related to the dairy industry either by production or processing.

Industry Profile

As of 2007 there were 243 dairy farms in Saskatchewan with an average herd size of 113 cows per farm.  Saskatchewan dairy farms produced on average 78 hectolitres (2,060 gallons) of milk per cow, or 8,831 hectolitres (233,290 gallons) of milk per farm annually.  From 2002 to 2007, milk quota in Saskatchewan grew 14.1% and increased again in 2008.  Saskatchewan is home to one milk processing plant (located in Saskatoon).

Farm Profitability

Based on Statistics Canada data from 2006, farm cash receipts for dairy farms in Saskatchewan were fourth in Canada at $549,115 and third highest in revenue and net cash income.  Dairy farms in the province also showed higher revenue and net income compared to the grains and oilseed sector and the beef sector (based on the Farm Financial Survey, conducted December 2007).

Economic Impact

Based on the findings of this study, the total economic impact of the Saskatchewan dairy sector was estimated at $883 million annually.  Just over half of this impact was generated through milk processing and associated activities with nearly 40% of the impact generated through on-farm and related activities.  The study also showed that the Saskatchewan dairy sector contributed $319 million annually to the gross domestic product of the province.

Going Forward

The study concluded that the dairy sector is a net positive contributor directly and indirectly to the provincial economy.  The dairy sector can continue to play an important and viable financial role in contributing to diversification of Saskatchewan agriculture and food industry.  Recently the industry has shown strong growth in quota due to increasing dairy product demand and favourable market developments.  The study suggested that expanding population in the province will also increase demand.  

The study "Economic Impact of the Saskatchewan Dairy Industry" was authored by G. G. Pearson and S.N. Kulshreshtha. Copies of the complete report are available by contacting the Dairy Farmers of Saskatchewan at (306) 949-6999.