Odhi Case Essay

2375 Words Feb 9th, 2016 10 Pages
ODHI Case Study

Executive Summary

The Ontario Dairy Herd Improvement Corporation, run by general manager John Meek, aims to improve the efficiency and profitability of dairy farming through an accurate, rapid, and cost effective milk testing service. Milk testing is an essential herd management component for all dairy processors as it measures the amount, quality and contents of the dairy products. Supply management agencies limit milk production; thus, profit is maximized through acquiring premiums from quality dairy with high levels of protein and butter fat as opposed to mass production and distribution. The dairy herd is the largest source of revenue for farmers, data from milk testing helps maximize milk production as farmers
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ODHI decides that they could implement one of the following alternatives for every group of consumers; a cost-reduction strategy, sponsorship program to increase revenue, or to do nothing.

PEST Analysis

By 1990, Ontario was the home of over 9300 dairy farms with over 450,000 cows. Over 1.3 billion dollars of milk was produced resulting in a total exceeding 4 billion in dairy product sales at the retail level. We can infer that the growth in the dairy industry was due to a dramatic increase in milk production per cow over the past 10 years due to genetic screening. An emphasis on genetic screening is inevitable; for instance, researchers at the University of Guelph have successfully cloned dairy calves. As a result, approximately 30% of Ontario dairy farmers have become breeders and derive a significant amount of revenue from the sale of breeding stock. Emphasis on genetic breeding and herd management is on the rise as the Ontario Milk Marketing Board issued quotas to limit the amount of milk that can be delivered to processors. However, we see a decline in the number of dairy herds within Ontario that are a part of a milk testing program from 7100 in 1985 to 6000 in 1990. John Meek believed this trend would continue unless proper action was taken. Lastly, technological advances have allowed for electronic milk testing systems,

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