WHY A PARTNERSHIP?
We are positioning the Canadian animal improvement industry for the future. Declining farm numbers, increased investment in on-farm technologies and the demand for more diverse services fits well with plans to integrate our business operations and meet changing customer needs.
WHY NOT A COMPLETE MERGER?
We have kept the model for this partnership simple and flexible in order to allow for the addition of future members. Our approach eliminates the need to value assets and liabilities that each party brings to the partnership and allows for each business entity to remain as a self-supporting operation. The partnership also avoids potential issues of land transfer taxes, pension liabilities…etc.
There are several good reasons for not having a legal merger. For dairy producers, they will see benefits as if it was a complete merger.
WHAT ARE THE BENEFITS?
We will be better positioned to manage business risk, take advantage of operational synergies and efficiencies, be able to better integrate genetics with management services and build on the strengths of each partner. We will be better positioned to help our customers tackle the future challenges of the Canadian dairy industry.
WHAT WILL THE PARTNERSHIP BE CALLED?
The partners have considered many potential names and the pros and cons of different options. In the end, we felt it was important to select a name that was new, progressive and bilingual. The partnership will be called Lactanet Canada.
WHAT DOES THE NAME LACTANET MEAN OR STAND FOR?
The word ‘Lacta’ has its origin from milk/dairy and ‘net’ stands for the network of dairy organizations that are forming the partnership, or that may join in the future. ‘Net’ also has a technology and information connotation (like internet, intranet…etc), which is reflective of the services that will be offered by the new organization. When put together, Lactanet is a new, innovative, bilingual name that reflects to a large extent what we are today, and what we will strive to be in the future.
An important aspect of our new name is to also clearly set the course for a new, innovative future that is not necessarily tied to tradition or doing things like we have in the past.
Will this affect my fees for services?
No. Each business activity will continue to operate as a separate division and fees will represent the actual costs of delivering services in the respective areas of operation or provinces.
WILL THIS AFFECT MY DHI SERVICES?
No. You will continue with the same DHI staff and services. The only immediate difference will be the company name and logo.
WILL OUR GENETIC EVALUATIONS CHANGE?
There is no change in our genetic evaluation processes and models. Our genetic evaluations will remain as the most reliable in the world as there will be no change to the process or people involved, formerly CDN staff.
How much money will you save?
We anticipate providing more services with the same resources and do not have a specific dollar savings target. Throughout the first year, we will continue with regular business as well as work to streamline our activities.
Were other organizations like breed associations, part of these discussions and why are they not in the partnership?
The partnership business model was developed to be scalable and allow for the addition of other partners in the future. At the onset, the partners wanted to ensure the likelihood of success of a major first step within the industry by not having too many organizations involved. Once we have the success of a first step behind us, it will be logical that we explore other opportunities to best meet the needs of Canadian dairy farmers and remain globally competitive.
WHY IS HOLSTEIN THE ONLY BREED ASSOCIATION ON THE BOARD?
Holstein is the largest breed representing about 93% of Canadian dairy cattle. The other 8 dairy producer directors are not required to be Holstein members. As the next largest breed associations, Ayrshire Canada and Jersey Canada will have a permanent seat on the Genetic Evaluation Board where breed associated recommendations will be made.
WHY IS SEMEX THE ONLY AI UNIT ON THE BOARD?
Semex is by far the largest Canadian dairy farmer owned AI unit with a national reach. The partners want to retain a dedicated Canadian team at the Board level.
WHY IS DFC ON THE BOARD?
DFC was on the former CDN board in a reciprocal arrangement – CDN also had a representative on the DFC board. This arrangement will continue in order to ensure ongoing communications and coordination between the animal improvement sector and the milk marketing sector of our industry.
What is Lactanet going to do to help us through the various trade agreements and the impact on producers?
As always, we are looking for more efficient ways to deliver services. Like you, we are looking at ways to improve and that is precisely why we are forming the Lactanet partnership. The benefit of Lactanet, is in part to make our organizations more efficient for the future. We did not predict or expect what is happening in terms of the various trade agreements, but are glad we took steps towards creating Lactanet, which will provide efficiencies long term for our industry and help producers adjust to those challenges.