October 14, 2011


Canadians pay double for milk


Canadians pay almost double that of the world's average price for milk, a national restaurant group said.


The Canadian Restaurant and Food Services Association (CRFA) says it's time to tackle the high cost of dairy. It has launched a website called FreeYourMilk.ca to educate consumers about why prices are so high and to allow the public to have a say.


The CRFA blames in part Canada's 40-year old dairy-supply management system for artificially pushing up prices.


The highly complex mechanism sets milk prices and production levels for farmers, while imports of dairy products are limited through tariffs.


The website includes a petition asking the government to re-examine the price-setting mechanism.


Garth Whyte, CRFA's president and chief executive said that when it comes to the cost of milk, Canadians deserve to know where they stand and the current system is making Canadian milk and cheese less attractive and less affordable for everyone.


The association cites statistics compiled by the Organization for Economic Cooperation and Development (OECD) that indicate Canadians pay 63% more than Americans for milk and roughly double the world average.


It claims the dairy supply management system costs Canadians about CAD2.4 billion (US$2.35 billion) a year.


Since 1994, the price of milk used to make cheese and yogurt has jumped by 58.5% while the consumer price index has risen 34.2%.


Those rising prices are one factor behind the falling consumption of milk, according to the group. Stats show Canadians drink 18% less milk than they did 20 years ago.


Dairy Farmers of Canada defended supply management saying it has ensured a high quality of dairy produce for Canadians.


Therese Beaulieu, assistant director of strategic communications at the farmers' association, said supply management only affects a small portion of the price consumers pay.


"The share that the farmer gets from the retail price of milk is only about 50%," she said, also pointing out that the costs of farming here are much higher than in countries such as New Zealand where the climate is milder.


Still, Whyte said there should be an investigation into why consumers pay so much more for dairy here.


Canada's dairy industry generated sales of CAD13.7 billion (US$13.4 billion) last year. It's the country's third most important agricultural sector after grains and red meat.


According to a CRFA survey, consumers in Quebec and the Prairies were most concerned about the cost of dairy, saying it was "very important" to keep costs down.


The high prices are affecting those in the lower income brackets the most, it found.

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