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PEST Analysis

1990, Ontario was domestic to over 9300 dairy farms, which comprised of over
450,000 cows. An aggregate of over 4 billion dollars in product sales at the
market level incurred while more than 1.3 billion dollars worth of milk was
being produced. The growth in the dairy business was attributed to the strong
increase in milk production per cow over the previous decade due to genetic
screening. The importance of genetic screening is invaluable to the growth
since researchers at the University of Guelph were able to clone dairy calves.

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Consequently, almost 30 percent of dairy farmers in Ontario became breeders and
have meaningfully increased their revenue from the sale of breeding stock. Herd
Management and genetic breeding is growing due to the quotas issued by the
Ontario Milk Marketing Board as they limit the amount of milk to be provided to
processors. Conversely, there appears to be a weakening in the number of dairy
herds inside Ontario that are part of a milk-testing program from 7100 in 1985
to 6000 in 1990. Lastly, there was a technological innovation, which permitted
for electronic milk testing systems, and thus sanctioning for the measurement
of milk production on a continuing basis. 


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