For dairy producers, pooling agreements are a good tool to manage the financial risks associated with the evolution of the domestic market. In its role as a national industry facilitator, the Canadian Dairy Commission (CDC) administers these pooling agreements on behalf of the dairy industry. Traditionally, provinces have used a variety of pooling calculations to equalize milk producer revenue. Pooling the proceeds from the sale of milk enables producers to receive an average price per hectolitre or per kilogram of milk component based on total sales. This concept of pooling became national in scope in August 1995 with the implementation of a system of pooling returns for sales of milk used by further processors and exporters.

Comprehensive Agreement on Special Class Pooling

Under the Special Milk Class Permit Program (SMCPP) implemented in August 1995, industrial milk is made available for use in dairy products and products containing dairy ingredients at prices which are competitive and which vary according to its end use. Thanks to the Comprehensive Agreement on Special Class Pooling, all of Canada's dairy producers share revenues from the sale of milk to processors for special class purposes, as well as markets.

Agreement on Eastern Canadian Milk Pooling (P5 Agreement)

Prince Edward Island, Nova Scotia, New Brunswick, Quebec and Ontario have been working together and sharing revenues since the Agreement on All Milk Pooling of August 1996. This agreement was later updated and replaced by the Agreement on Eastern Canadian Milk Pooling (or P5 Agreement) in April 2010. Under this agreement, the provinces share revenues from all milk sales (fluid and industrial), transportation costs, markets, and skim-off. The agreement also provides for the harmonization of other elements such as component pricing, a daily quota system and a coordination function to assist in further harmonization efforts.

The CDC chairs the Supervisory Body of the pool, administers the pooling agreement, does the pooling calculations and provides technical expertise and secretariat services to the pool. Details on this pool's activities can be found in the Annual Report of the CDC.

Western Milk Pooling Agreement (WMP)

In 1997, the four Western provinces (Manitoba, Saskatchewan, Alberta and British Columbia) implemented and all-milk pool where revenues and markets for all milk classes are shared. The existence of this pool allows for harmonization to take place between the four provinces, with an emphasis on milk transportation, milk receiving at plants and milk allocation to plants.

The CDC chairs the Coordinating Committee of the pool, administers the pooling agreement, does the pooling calculations and provides technical expertise and secretariat services to the pool. Details on this pool's activities can be found in the Annual Report of the CDC.

Pools in Numbers 2011-2012