June 23, 2022

 

Canadian milk prices rising following dairy commission second hike

 

The Canadian Dairy Commission will increase wholesale milk prices on September 1 by 2.5%, a rare move intended to partially offset the effects of inflation on dairy farmers, the Hamilton Spectator and Canadian Press reported.

 

After wholesale milk prices increased 8.4% in February, Canadian milk prices soared by to record highs earlier this year. The Canadian Dairy Commission, a federal crown corporation that determines the price of dairy at the farm level, typically raises prices by one or two percent each year.

 

The Dairy Farmers of Canada asked for a second price increase this year due to inflation-related increases in the price of fuel, fertiliser, and feed. According to a news release from the dairy commission on Tuesday, the costs of feed, energy, and fertiliser have increased by 22%, 55%, and 45%, respectively, since August 2021.

 

This occurs as part of Canada's ongoing problem with sluggish inflation and rising food prices. Groceries saw the biggest increase since September 1981 at almost 10% in April, when inflation was 6.8% year over year. This week is predicted to see the release of May's inflation data.

 

The dairy commission has recently come under fire due to its involvement in Canada's supply management system, The way it decides how much to charge for dairy products is criticised as not being transparent enough. Even the groups consulted, like processors, retailers, and restaurants, claim they are unaware of the increase until it is made public. Consultations are not made public.

 

Sylvain Charlebois, director of the Dalhousie University Agri-Food Analytics Lab, said he and other knowledgeable people expected something closer to 7% or 8%, so the 2.5% increase came as a surprise.

 

Charlebois said that the dairy commission is becoming more concerned about consumers as well as farmers because consumers are becoming more aware of even the smallest price increases as a result of the inflationary rampage.

 

Gary Sands, senior vice-president of the Canadian Federation of Independent Grocers,s said the Canadian Dairy Commission deserves some credit.

 

Sands believes the dairy commission paid attention to stakeholders' concerns, including those about food security as the price of a common food staple rises.

 

Murray Sherk, chair of the Dairy Farmers of Ontario, said a mid-year adjustment was required, because inflation started making headlines after the final dairy commission announcement in November.

 

the Dairy Farmers of Canada said the dairy commission's price hike acknowledges the pressure farmers have been under.

 

The dairy commission's price increase, according to a statement from the Dairy Farmers of Canada on Tuesday, acknowledges the pressure farmers have been under.

 

-      Hamilton Spectator and Canadian Press