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Manitoba milk industry hit hard by gas outage

Dairy farmers in Manitoba have been left with a sour taste in their mouth this week.

The natural gas pipeline explosion near Otterburne and the resulting gas outage forced the closure of two milk processing plants in the area over the weekend. With no natural gas available, the cheese plant in New Bothwell and the Parmalat plant in Grunthal had to shut down operations, forcing producers to salvage what they could before the milk went bad.

"There have been a number of truckloads of milk that have been discarded because there was no processing capacity left," David Wiens, the chair of the Dairy Farmers of Manitoba, said this morning.

Wiens said producers have discarded approximately 300,000 litres of milk, at an initial estimated cost of about $240,000.

The dairy industry in the province was already under a stress before the plants in New Bothwell and Grunthal were forced to suspend operations. A milk processing plant in Winkler was removed as an option as it is in the process of consolidating its operation to Brandon, leaving the province already short one plant.

With the clock ticking on salvaging the surplus raw milk and the remaining processing plants in the province full, the Dairy Farmers of Manitoba were forced to haul some of the raw milk to plants in Saskatchewan and Alberta. Unfortunately, a limited extra capacity in those out-of-province plants (producers in Saskatchewan and Alberta were operating under normal conditions) meant that some raw milk had to be discarded.

"We’ve already moved 200,000 litres of raw milk to Saskatchewan and Alberta, and we expect to move another 370,000 litres in the next few days as our plants try to catch up," Wiens said, noting that there will be added transport costs on top on the $240,000 lost in raw milk product.

Wiens wasn’t ready to guess on what the final price tag will be or whether costs will be covered by insurance or by TransCanada Corp., the energy company that owns the natural gas pipeline.

The New Bothwell plant resumed its operation Tuesday evening, while the Grunthal plant was expected to start up again this morning, Wiens said. The expectation is that both plants can catch up on the excess inventory in the next few days.

"I would hope by early next week that we’re back to normal," he said.



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