Agropur looking for growth in U.S. while defending Canada’s quota system

MONTREAL – Canada’s second-largest dairy producer, the farmer-owned Agropur Cooperative, says it sees the company’s growth not within the nation, where it’s defended the protectionist supply-management system when threatened with free-trade deals, however in the U.S. where it can import to international markets including north of the border.

“It’s certain that development for all of us will come primarily from the Usa,” said Agropur CEO Robert Coallier during a news conference following a company’s annual general meeting in Montreal on Wednesday.

“This season we became among the five largest makers of cheese and dairy ingredients in the United States. We’ve achieved the critical mass to become a major player.”

The Longueuil, Que.-based company reported a 26 per cent revenue rise in the past year, totalling $5.9 billion. Of this, 44 percent of revenue originated from U.S. operations. 

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Agropur continues to be an outspoken defender of Canada’s supply management system, which sets a quota for how much milk could be imported tariff free to be able to protect farmers including the co-op’s 3,367 members from foreign competition. 

It spoke out from the Trans-Pacific Partnership trade deal allowing countries including New Zealand and also the U.S. greater access to Canada’s dairy market amid slow-growing domestic consumption.



Dairy from Europe, New Zealand, america and other countries will access 5.5 percent a lot of Canadian market when the TPP and  are ratified and fully take effect.

Critics say Agropur is hedging its bets by advocating for a system that protects its members while setting up shop in the U.S. and ultizing being able to import foreign dairy protein. 

But the company says it’s only keeping up with other two major Canadian dairy players, Saputo Inc. and Parmalat, which also have U.S. operations. 

“Agropur is making a case based on how supply management is not working,” said Sylvain Charlebois, a professor within the Food Institute in the University of Guelph. “Agropur feels compelled to compete against Saputo and other companies, so that’s why they have to bring in cheaper protein from abroad,”

The company says it creates 30 percent of Canadian dairy while importing 12 percent of milk protein – proportionally less than its competitors.  

In August 2014, Agropur acquired Davisco Foods International operations, doubling its U.S. operations and increasing total milk supply by Half.

For 2015, Agropur reported a ten.2 percent rise in EBITDA to $306 million and processed a lot more than 5.7 billion litres of milk at its plants across North America.

“Agropur is a well-managed business, but politically they’re stuck from a rock and a hard place at this time due to supply management,” Charlebois said.

Along using its dairy farmer ownership, Agropur also offers high-powered backers in Quebec, including the Caisse de dp?t et placement du Qubec.

Last December, the co-operative received $300 million from the team investors led by Quebec’s public pension fund manager, putting the group’s total contribution at $770 million.

dvanderlinde@nationalpost.com

Twitter.com/DamonVDL