PRESENTATION TO DAIRY FARMERS OF ONTARIO 2014 ANNUAL GENERAL MEETING JANUARY 8, 2014 “WHEN YOU COME TO THE FORK IN THE ROAD … TAKE IT” OR “THERE ARE NO RIGHTS … ONLY PRIVILEGES” Peter Gould General Manager Dairy Farmers of Ontario
Dairy Farmers of Ontario Annual General Meeting Fairmont Royal York, Toronto January 7-9, 2014 2 OUTLINE I 2013 Review: (i) DFO - Succession / Restructuring - Application Framework - P8 - Traceability / Handhelds - New Dairy Research and Innovation Centre II A Look Ahead (i) CETA (ii) Modernizing Supply Management (iii) Trans Pacific Partnership (TPP)
Dairy Farmers of Ontario Annual General Meeting Fairmont Royal York, Toronto January 7-9, 2014 3 INTRODUCTION Despite what may or may not happen, there are only so many things that are within our control. And, for those things, we keep moving forward … we do the very best we can, we strive for excellence. We have things we aspire to do, things we try to achieve. From that perspective, 2013 was a very positive year marked by significant achievements. In hindsight, some could have been done better, a little differently … so we’ll work to get that done in 2014 and I’ll give you some examples , later in the presentation. At the same time, some pretty big clouds rolled in just as fiscal 2013 ended. I have been saying for over a year that CETA, the Canada-EU Trade deal was a bell-weather, not the biggest deal from a milk marketing perspective but one that would indicate what lay ahead in the Trans Pacific Partnership, where New Zealand, the US and Australia have their own aspirations for the Canadian dairy market. A bad day in Mississauga or Longueuil or Ottawa can be a good day in Auckland, Washington or Canberra. I’ll be frank , the new TRQ granted to the EU is much larger than I imagined. With that, we may all have to recalibrate
Dairy Farmers of Ontario Annual General Meeting Fairmont Royal York, Toronto January 7-9, 2014 4 our thinking and again remind ourselves, and take seriously that we enjoy many privileges … and no rights that I can think of. I. 2013 in Review … DFO (i) Let me start with restructuring and succession . With several retirements of long-service employees, Pat Paines (45 years), Wes Lane (40 years) and Dave Nolan (37 years), Susan Senchyna (30 years, Bill Dimmick (26 years) we went from an organization with seven operating divisions to four, reducing the number of Director positions by three. In addition, there were a number of key departures, in Transportation and Communications; these were all situations where people moved to better opportunities. While it takes a lot of work to hire people, it’s also good to know that other companies / organizations value individuals who have experience with DFO. At the same time, it gives DFO the opportunity to go out and hire new people. It’s also a positive that DFO can attract and hire hig hly qualified individuals, Robert Nosek, Transportation Manager, Maria Leal, responsible for FSRs, CQM and farm inspections, Laural Adams, Communications. We’ve also hired five new FSRs … and I have to say I’m impressed with all of them. The organization
Dairy Farmers of Ontario Annual General Meeting Fairmont Royal York, Toronto January 7-9, 2014 5 chart(s) is available on the DFO web site. For the first time, in many years, we have a full staff compliment and minimal expectation of turnover for the next several years. Our latest addition is Eric Snow who’ll be working in Transportation, is someone I’ve known and worked with and brings a strong knowledge of the dairy industry. On the succession side, we are striving to develop depth in all key positions. In fiscal 2014, we’ll implement a development plan to ensure there are a number of internal candidates for when the GM position opens up. (ii) At last year’s AGM, we had selec ted the vendor for a total re-write of DFO’s software and were negotiating the contract. That contract was signed with the project officially beginning on February 1, 2013. The budget was / is $2.5 million dollars with a timeline for completion of 20 to 24 months, e.g. fall of 2014. It would be wrong to say we didn’t know what we were getting into. We knew it was going to be an intense and labour intensive process, involving just about everybody in the organization, some obviously more than others. It has been every bit of that and then some. I can say without qualification this is the biggest project DFO
Dairy Farmers of Ontario Annual General Meeting Fairmont Royal York, Toronto January 7-9, 2014 6 has ever been involved in … it has meant people doing their regular jobs, plus what’s needed for the application framework, countless hours, lots of work on evenings and weekends … but I’ve not heard a word of complaint. If anything, it has strengthened the team spirit. The project has not been without hurdles or what I’ll call mini crises (plural). We’ve worked through them with our partner, Systems Group. In November, we completed what’s called “requirements gathering” … documenting every detail, every calculation, every process to run producer payment, plant billing, transporter payment, raw milk quality, CQM and everything else DFO does. That is the forest, where you can’t always see a way out. Now we are looking ahead to the new program, the optimization, the new software. No less hard work, but one where you can look forward to the results. I will share with you that the Board has made it clear; there can be no slippage on budget. We still expect completion in late fall 2014, well within the expected timeframe. However, if there is a compromise, it will be on time, not money, if needed. (iii) Parallel to DFO’s initiative on the application framework, discussion also began about a year ago with the other nine provinces . Understanding what motivated DFO perhaps other provinces might
Dairy Farmers of Ontario Annual General Meeting Fairmont Royal York, Toronto January 7-9, 2014 7 have similar interests / needs. Fast forward to today, we do have something called the P8 IT Group . It does not include Quebec or Newfoundland. The other provinces are actively engaged in a process that will lead to sharing infrastructure and the development of a common software platform. This is a big undertaking for each of the individual provinces and one that requires a huge coordinating effort to bring everyone together. System Group is the software partner and Reimer and Associates is responsible for coordinating and planning the project. Each province will retain the full integrity of their own data. What we envisage is an environment where a future change in policy requires only one change to the software that can be applied in all provinces, and eventually where policies will converge, where everyone will have secure back-up, where risks are minimized, where costs are shared. The participating provinces all see the benefits of a shared vision and the opportunities that go with it. (iv) Just about a year ago, we signed a contract to buy new handheld computers for all the transporters. They were delivered in April and rolled out to bulk tank milk graders. The roll-out was completed by October. This was a seamless operation. These new
Dairy Farmers of Ontario Annual General Meeting Fairmont Royal York, Toronto January 7-9, 2014 8 handhelds are state of the art. They automatically collect way more data than the previous generation of handhelds and transmit data, automatically, in real time, via satellite. Part of the project was the need to replace the old handhelds. The other part is the analytics, the tools DFO will now have to help manage and optimize transportation. This is also an example where the technology could be used in other provinces. Lastly, the new handhelds were integral to a project to improve traceability for dairy products … from the farm to the consumer and vice versa. CDMI, the infant formula company, and Parmalat were co-operators in a simulated product recall. Completing the simulation was one of the criteria needed to get a provincial grant for both CDMI and DFO. The deadline for completion was December 15, 2014. The simulation was successfully completed on December 4, 2015. The simulation was an early harvest of the application framework … in other words, it was run using new software that is part of the overall software solution. I want to thank both CDMI and Parmalat for their co-operation. I also want to thank the province for its generous grant which was certainly helpful and appreciated. Part of the reason that DFO was
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