Milk marketing bottleneck
by Richard Gleeson
NNSL (Aug 13/97) - The North's only dairy farmer is resorting to selling milk off the back of his truck because city food retailers either don't want his product or will not price it properly.
Neil Myers said he is offering the lowest wholesale prices in the country but his offers are either being turned down or not passed on to the consumer.
In the dairy business, however, product must move. To keep up with his 65 cows, which produce 1,450 litres of milk each day, Myers is bringing his product directly to consumers.
"The first day after production and testing, we're going to sell it for $1 a litre, the second day 90 cents and the third day 80 cents," said Myers of his plan to sell milk off the back of a Tuaro Truck.
Tuaro milk is currently being sold at the Yellowknife Direct Charge Co-op, WalMart and Country Corner.
Myers said Westfair Foods, owners of the two Extra Foods grocery stores in the city, has not responded to phone calls and letters.
In one of the letters, Myers offers to sell his milk to Westfair for what he said was the lowest price in Canada.
Westfair, he said, is paying its current supplier, Dairyworld, about a dollar more for each four-litre jug than he was offering.
"I think it has to do with the history of this dairy, but I'm just guessing because they don't answer my calls," said Myers.
Westfair did not return Yellowknifer phone calls.
The co-op sells both Tuaro and Dairyworld milk. Though Tuaro milk is priced lower than Dairyworld's, the shelf prices do not nearly reflect the difference in wholesale prices, said Myers.
"They said they don't want to get into a price war with Westfair (Extra Foods)," said Myers, a theory confirmed by co-op grocery manager Al Krukoff. "If we were to drop our milk as low as he wants it to go, the next day Extra Foods would drop their price below where we went," said Krukoff.
"(Extra Foods) is part of a huge chain, and one store somewhere losing money on milk, to them is not a big deal."
Tuaro also sold milk through home delivery, but Myers said that after delivery and administrative costs, each four-litre container was being sold for 39 cents less than wholesale price. As a result, home delivery was suspended Monday.
Tuaro's marketing problems come on top of a recent recall of Tuaro milk last month because of the presence of antibiotics.
Myers accepted blame for that, saying he mistakenly milked two cows he was treating with the antibiotics. But he said the contamination amounted to no more than a thimbleful in 4,500 litres of milk.
All milk now gets tested before being distributed to the public, he said.
Myers said he has no long-term hopes of selling products off the back of his truck.
"People won't stop at 40 below to buy milk from a truck, but it'll serve to make my point," he said. "If I'm losing money I might as well have fun doing it."
The fun may not last for long, he added.
"If it doesn't (start making money) by the end of September, we're gone. It wouldn't be a matter of choice, I'd have to go while I still have my bus ticket home."