Another increase in the price of milk

The Canadian Dairy Commission approved a second increase in the price of milk this year, something very rare.

The crown corporation, which oversees Canada’s dairy supply management system, said on Tuesday that farm-gate milk prices will rise about two cents a litre, or 2.5%, on 1^Ahem September.

This increase comes after milk prices rose six cents a litre, or about 8.4%, on 1^Ahem february.

The commission said that when it reviews prices in the fall, the approved mid-year price increase for 1^Ahem September will be deducted from any adjustment for the following February. Prices are generally reviewed once a year.

The move follows a May request by Dairy Farmers of Canada for a mid-year milk price increase due to high inflation.

The industry lobby group said farmers are facing never-before-seen price increases on the goods and services they need to produce milk.

The commission said in a memo to stakeholders including processors, retailers and restaurants that higher milk prices will partly offset higher production costs due to inflation.

“Food, energy and fertilizer costs have been hit particularly hard, with respective increases of 22%, 55% and 45% since August 2021,” the commission said.

The actual increase in milk prices for consumers could be much higher, as additional price increases could also be applied by different actors in the supply chain.

“The impact of these adjustments on retail prices will depend on many factors, such as manufacturing, transportation, distribution and packaging costs throughout the supply chain,” the Commission said.

Still, the increase approved by the dairy commission is well below what some industry watchers had expected.

“It could have been worse,” said Sylvain Charlebois, a professor of distribution and food policy at Dalhousie University.

“Based on the data we analyzed, we expected an increase of more than 5%. I expected much more. »

In recent weeks, the Dairy Commission has come under pressure from various industry stakeholders to keep prices manageable for Canadian consumers.

“The Canadian Dairy Commission is beginning to listen to Canadians and their concerns about food inflation,” Charlebois said. “The CDC has tried to find a balance between the needs of the industry and what consumers feel. »

Meanwhile, in a mandate letter sent to the chairman of the Canadian Dairy Commission in mid-April, Agriculture Minister Marie-Claude Bibeau highlighted the need for greater transparency.

METER^me Bibeau said one of the priorities is for the board to review its approach to milk pricing decisions to ensure clearer and more transparent communication with Canadian consumers and dairy stakeholders.

The Commission issued a press release on the increase in farm milk prices, in addition to informing stakeholders of the price adjustment through a memorandum.