It is impossible to give you an exact cost as quota is based on production, not the amount of cows you have.

However, hypothetically, the average cow (Holstein) produces about 34 L of milk per day. As quota is currently sitting at $36,900, for a 108 cow dairy, it would be about $3,985,200.

Quota can be thought of as a type of franchise fee for starting up a dairy farm, like something a chain restaurant would have, for example. This start-up cost allows dairy farmers to produce milk in a highly stable and predictable market and receive fair returns for their hard work through supply management. More details can be found in our response to Jeff’s question.

Essentially, quota price is based on the willingness of producers to pay for the capacity to produce milk. It is determined on the Alberta Milk Quota Exchange, which is a type of two-way auction. If the participants in the quota exchange truly viewed the price as expensive, they would bid less to buy quota, or offer to sell quota for less, and the price would decline.

You might be interested in learning more about our New Entrant Assistance Program as well. This program helps alleviate some of the costs of starting a dairy farm.