Canadian dairies are booming

David Wiens thought the 2,500-gallon (9,470-liter) stainless steel milk tank he purchased 20 years ago would provide more than enough storage for his dairy farm in Manitoba. These days he’s producing so much he’s had to order a new tank that can hold almost three times as much. “We have to have everyday pickup now because we don’t have the capacity,” Wiens said from Skyline Dairy, a 240-head operation near the small town of Grunthal that he and his brother Charles have owned since 1989.As the U.S. takes aim at Canada’s dairy sector as it attempts to renegotiate the North American Free Trade Agreement, the nation’s farmers and processors are forging ahead with some of their biggest expansions and investments in more than a decade.That’s partly to do with rising demand for butter, which consumers increasingly view as a healthy part of their diet. Canada’s dairy sector receives tariff and quota protections from its government, and also benefits from a new policy, the so-called Class 7 pricing formula, which helps it deal with the leftover skim milk from butter-making.The change has spurred some big investments. Gay Lea Foods Co-operatives and Vitalus Nutrition opened a new C$100 million processing joint venture in Winnipeg, Manitoba, last fall. This month, Nestle Canada said it will spend C$51.5 million to increase production at its ice cream factory in London, Ontario. China’s Feihe International is planning to spend C$225 million to build the nation’s first wet infant-formula facility in Kingston, Ontario, which is slated to be completed by 2020. More announcements are expected in 2018, according to industry lender Farm Credit Canada.