March 12, 2007 N e w s Credit day added beginning March 1 Clocks

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					                                    Credit level will be reviewed on a month-by-month basis
  March 12, 2007
                                    Credit day added beginning March 1
                                           ne temporary credit day per month has been added effective
  e                                        March 1, 2007. The rationale for the decision was that projected
  w                                        year-end utilization for Ontario would be about 98 per cent unless
                                    these steps were put in place.
  s                                     One credit day is equivalent to about three per cent additional quota
                                    for each month. As before, these credits are non-cumulative.
                                        The credit day could be adjusted or removed if milk production comes
Fall Incentive set at one           more in line with quota holdings.
day for Aug. through Nov.
The Fall Incentive Program for      Pre-programmed clock will not affect TTR operation
2007 is one credit day per          Clocks spring ahead but don’t adjust your TTR
month for the four-month period
August through November.
   This is equivalent to about
three per cent additional quota
                                    D       airy farmers are being asked not to attempt to change the time on
                                            your Time Temperature Recorder (TTR) with the change to Daylight
                                            Saving Time. The TTRs are programmed to make the time change
                                    three weeks later. This is because the programming was completed
for each month. As before, these    before Canada announced it would follow the U.S. lead to move to the
                                    earlier date for Daylight Saving Time.
incentive credits are non-cumu-
                                       The TTR's internal time will be off by one hour for three weeks but this
lative.                             will not affect TTR operation and will be accounted for in DFO's records.
                                    Can-West DHI is also aware of the issue and will take the difference into
Approved quota level                account when collecting your information.
now shown on statement
Beginning this month, each          Local and provincial efforts to prevent planned closure
farm’s maximum approved
quota level appears on milk
                                    Hershey plans to close Smiths Falls plant
   This is important If you are
planning to buy quota. If you are
                                    H      ershey stated in late February that it has plans to close its chocolate
                                           factory in Smiths Falls this year. That means dairy farmers could
                                           lose a market that uses 40 to 50 million litres of milk annually.
                                       The milk marketed to the plant, plus components purchased from
approaching       your     farm’s   other processors, represents an estimated 0.8 per cent of quota. Efforts
approved maximum, you must          are underway at the local and provincial level to try and maintain the
apply to exceed the screening       plant.
                                       Hershey had announced mid-February it would be cutting 1,500 North
level before entering a bid to
                                    American jobs as part of a company restructuring plan. It is also building
purchase additional quota.          a new manufacturing facility in Mexico.
   Check page 12 of the online         Hershey buys milk under the class 5c price for confectionery products
DFO Policies Book (in the Farmer    which is priced around $30 per hectolitre. This is competitive with current
section under Publications), for    world prices.
information and an online appli-       This closure is not about milk prices or supplies. A guaranteed milk
                                    supply has been provided to the plant by Ontario farmers at prices that
cation (available under Forms).
                                    compete with any location in the world.
                                                                 6780 Campobello Road, Mississauga, Ontario L5N 2L8

                                                       Quota Exchange Results for March 2007
                                                                ECP = $30,501.00/kg
           Price Range          Producer           Sale                                      Sale                      Purchase         Kilograms             Producer
                ($)              Offers         Kilograms                                 Cumulative                  Cumulative         Bid For                Bids
        28,499 or less              8            155.30                                    155.30                       1,771.1             80.0                  7
        28,500 to 29,499           13            274.74                                    430.04                       1,691.1             68.1                 15
        29,500 to 29,999           14            288.19                                    718.23                       1,623.0           186.8                  44
        30,000 to 30,500           13            160.30                                    868.43                       1,436.2           565.8                146
        ECP = 30,501                0               0                                      868.43                         870.4             29.4                  6
        30,502 to 30,999            0               0                                      868.43                         841.0           607.4                116
        31,000 to 31,499            0               0                                      868.43                         233.6           226.6                  29
        31,500 to 32,499            0               0                                      868.43                           7.0              7.0                  3
        32,500 or more
        Totals                     48            868.43                                                                                 1,771.1            366
        Successful                 48            868.43                                                                                   870.4            154
        Adjustment                  -                 -                                                                                     -                -
        Transfer Assessment: March 2007 = 121.200 kg                                                 To-Date = 357.563 kg                Redistributed - 120.316
        Pay-What-You-Bid Fund: March 2007 = $237,360.60                                              To-Date = $1,485,688.40

                                        TO SEND A BID OR OFFER TO THE QUOTA EXCHANGE
1. Write down bids or offers before calling. Examples are shown below:                     5.     Your bid or offer will be read back to you. If it is incorrect, re-enter the
                                                                                                  complete message.
    Buy ________ kilograms quota at ________ dollars per kg.                 Payment
    method by cheque or milk cheque deduction.                                             6.     MILKLINE will give you a transaction confirmation number. Record the
    Sell ________ kilograms quota at ________ dollars per kg.                                     number and save it with your written bid/offer. You also receive the option
                                                                                                  of a fax-back confirmation of your bid or offer.
2. You can make bids or offers on the quota exchange either through
   MILKLINE, an automated bilingual telephone service requiring a touch-tone               7.     To reach the quota exchange bidding through the Internet (,
   phone, or through the Internet.                                                                select the LOGIN link, enter your licence number and primary password,
                                                                                                  when prompted, to access the system. Follow the instructions for
3. To reach the quota exchange through MILKLINE, dial 1-800-386-9109.                             submitting your bid or offer.
   Bids and offers are accepted 24 hours a day, from the 20th of the month
   until the 1st of the next month, inclusive (i.e. March 20 to April 1 for the            8.     Submit your bid or offer a few days prior to the deadline, the 1st of each
   April exchange).                                                                               month, to allow adequate time for corrections, if necessary.

4. Once you reach MILKLINE, using your telephone keypad, press 2 for                       9.     If you need to cancel or make any changes to a bid or offer, contact DFO’s
   Producer Services, followed by your licence number and primary                                 head office during business hours by the 1st of the month.
   password. Then press 3 for Quota Exchange. Follow the instructions for                         Changes/cancellations will not be accepted after the 1st, or the last
   submitting your bid or offer. (When entering the kilograms wanted to buy or                    business day prior to the 1st if the 1st is on a weekend or holiday.
   for sale, the last number you press is always the tenth of a kilogram, i.e.
   after the decimal. You must also complete your bid by pressing the "#"                  10. Submit your bid or offer to the nearest dollar. It is recommended that
   key).                                                                                       producers not bid in even thousands or hundreds of dollars.
    Examples:    •   to bid for 0.5 kg, press 5, then #                                    11. The minimum purchase or sale is 0.1 kilogram of quota.
                 •   to bid for 1.0 kg, press 1, then press 0, then #
                 •   to bid for 1.5 kg, press 1, then press 5, then #                      Note to producers selling their total quota: Once you have sold your
                 •   to bid for 10.0 kg, press 1, then press 0, then press 0,              total quota, DFO will no longer pick up your milk. If you sell your total
                     then #                                                                quota on the April exchange, there will be no further pickups after your
                 •   to bid for 10.5 kg, press 1, then press 0, then press 5,              last regularly scheduled pickup in April.
                     then #

      Explaining Changes to This Month's Blend Price                                                                               Blend Prices
                                         Feb              Jan
                                         2007             2007               Change
                                             (Figures in $ per hectolitre)

Revenue From Processors               $74.48          $70.17                   $4.31
Contribution from Over-Quota           $0.21           $0.25                  -$0.04
Pool Adjustments                       $1.33           $0.67                   $0.66
Other                                 -$0.37          -$0.48                   $0.11
Producer Blend Price                  $75.65          $70.61                   $5.04