December 8, 2004

 

 

Possible Milk Price Hike in Canada

 

Peter Attwell, chair of the Norfolk Milk Committee and one of Norfolk's 30 dairy producers, says there will likely be an increase when the Canadian Dairy Commission (CDC) reviews milk prices this week. But the 10 to 15 per cent that the Dairy Farmers of Canada is expected to request is not likely.

 

"To me, three per cent would be plenty, which we would have gotten anyway," he said. The higher percentage, he says, was likely influenced by the requests of hard-hit provinces such as Quebec.

 

According to the Dairy Farmers of Canada, producers are under strain because of BSE (bovine spongiform encephalopathy), which has seen the US borders close to live Canadian cattle. For dairy farmers, that affects cull cattle, which is cattle over 30 months of age used for hamburger and beef products. It also affects breeding stock, which can account for as much as a quarter of an average dairy farmer's operation.

 

Bill Emmott, a Brantford area producer who is a director on the national and provincial organizations, says it has cost farmers 20 to 30 per cent off their top line.

 

"That needs to be recognized some place," he said.

 

The Canadian Restaurant and Foodservices Association is one of the most vocal groups lobbying against a price increase. Vice president Stephanie Jones says compensation for BSE should be done in one place and in a transparent forum. Increasing dairy prices, she says, is like a BSE tax on consumers. Restaurants would have no choice but to vary their menus to handle the increase. Jones says the cost of dairy production has decreased 5.1 per cent over the last 10 years.

 

That figure perplexes Attwell.

 

"What industry has costs that have gone down?" he said. "Labour costs are the same. My insurance has gone up. My energy and fuel have gone up. The cost of producing milk certainly has not gone down."

 

Andrew Schneider, owner of the Erie Beach Hotel, says any price increase affects his business. He says in an era where the cost of everything is rising, he wouldn't be surprised by a minimal increase. But his reaction depends on how large of an increase.

 

"Is it going to put us out of business? I doubt it," he said. "But when it gets to the point where we can't absorb it, we eventually have no choice but to pass it on to the consumer."

 

Emmott predicts a five to six per cent increase on tomorrow. A 10 to 15 per cent hike, he says, "seems extremely high." He says farmers face the reality of rising costs is an issue that is not going away quickly.