The agri-food chain today is significantly different from that of twenty years ago. Changing consumer demands, knowledge intensive technology, North American integration and globalization have all contributed to the evolution of the different segments of the chain, which include input suppliers, agricultural producers, food processors, and food distributors. The purpose of the performance report series is to create a picture of the economic health of the entire agri-food chain and its various segments, and to identify the challenges and opportunities that they will face in the future. To get a full picture of each component's and the whole chain's economic health, these reports will measure economic performance from several different perspectives; profitability, competitiveness, investment, productivity, innovativeness, etc. Traceability is the process of tracking or tracing the flow of products through a supply chain. Traceability systems can vary from simple traceback systems to systems that provide identity preservation and quality assurance. This report examines the extent of traceability in the Canadian dairy processing industry. The authors use a mail survey and Principal Component Analysis to better understand the drivers, the challenges and the costs and benefits experienced by firms which have implemented traceability systems. The report finds that most dairy processing plants had implemented a system of product traceability and are able to trace forward and backwards.