February 2, 2005

Canadian province sees jump in prices of wholesale milk

The wholesale cost of milk will be more expensive on Tuesday, as a rise in the industrial price of milk takes effect in Canada's St John's province.

Each litre of milk will cost eight cents more per litre.

The retail price will vary in stores across the province, although most stores are expected to pass on the increase. That means a two-litre carton of milk that previously cost $3.15 would increase to $3.31.

Five cents of that increase will go to farmers, with the remaining being split between processors and distributors.

Fuel prices are a significant factor behind the increase, but farmers in this province have also been affected by the mad-cow scare of the past two years.

When older cows are sold for meat, the prices they fetch are much lower than they used to be, said Derek Connelly, a policy adviser with the Dairy Farmers of Newfoundland.

Similar increase has come into effect in the Maritimes.