MARKETS
Ice cream faces challenges A
s summer arrives, consumers traditionally cool off with .their favourite frozen treat. However, real ice cream made with butterfat has been fighting for this market since Ontario repealed its Edible Oils Act seven years ago. In Ontario, where 60 per cent of Canada’s ice cream is made, a 2004 ruling by a panel set up under the Agreement on Internal Trade forced the provincial government to repeal the Edible Oils Act. The AIT is aimed at reducing and eliminating trade barriers within Canada. Alberta and British Columbia had challenged the act, which basically prohibited sales of products blending butter with vegetable oils. The act’s repeal also opened the door for food manufacturers to introduce frozen desserts. Packaged to look like real ice cream, these products substitute vegetable oils for butterfat. The whole category of ice cream and related products is struggling in the marketplace, according to the most recently available retail sales fig-
ures. For the 12 months ending May 5, AC Neilsen Company figures show category sales were down 5.1 per cent compared with the same period one year earlier. Related products include frozen desserts. Ice cream at least has been gaining some market share. It currently holds about 66 per cent, up from 60 per cent two years ago—suggesting Dairy Farmers of Canada promotions are having some effect. DFC has been promoting ice cream and warning consumers to beware of
P5 and Western Milk Pool blend prices*
The graph below shows the 12-month blend price for the P5 provinces and the Western Milk Pool (WMP).
*There is a two-month lag reporting these figures.
Solids non-fat to butterfat (SNF-BF) ratio
This graph shows Ontario’s SNF-BF ratio for the last 12 months in relation to Ontario’s target SNF-BF ratio of 2.2840.
80 78 Blend price in $/hL 76 74 72 70 WMP $77.41 P5 $75.45
2.45 2.4 SNF-BF Ratio 2.35 2.3 2.25 2.2 2.15 2.32
June 2011 July 2011 Aug 2011 Sep 2011 Oct 2011 Nov 2011 Dec 2011 Jan 2012 Feb 2012 Mar 2012 Apr 2012 May 2012
P5 blend price WMP blend price
Ontario’s SNF-BF ratio Target SNF-BF ratio
40 | July 2012 | MilkPRODUCER
June 2011 July 2011 Aug 2011 Sep 2011 Oct 2011 Nov 2011 Dec 2011 Jan 2012 Feb 2012 Mar 2012 Apr 2012 May 2012
Table of Contents for the Digital Edition of The Milk Producer - July 2012