Cost of dairy products could skyrocket as Canadian Commission recommends price increase

TORONTO-

The Canadian Dairy Commission (CDC) has recommended a significant increase in farmgate milk prices beginning early next year, which is expected to increase the cost of milk used to make dairy products for retail sectors retail and catering.

The average cost of milk for processors could increase by an average of 8.4%, according to the CDC in a Press release posted on its website on Friday.

Butter is another product subject to price adjustment. The support price for butter used by the CDC in its storage programs could increase by 12.4%. The CDC says it is stockpiling butter to ensure an adequate supply and avoid shortages.

The new prices will only become official after they have been approved by provincial authorities, a decision that is expected to come in early December 2021.

The recommendations were made after a CDC review of farm gate milk prices and costs under the supply management system, as well as consultations.

“The increase will partly offset a significant increase in production costs incurred by farmers since the start of the COVID-19 pandemic,” Pierre Lampron, president of Dairy Farmers of Canada, told CTVNews.ca in a statement. “For example, the price of livestock feed has risen dramatically, along with the costs of fuel, machinery, fertilizer, seed for crops and more.”

How much this will affect consumer prices remains to be seen, but one expert expects significant increases.

Although the CDC regularly recommends price increases, “[8.4 per cent] is an all-time high,” Sylvain Charlebois, director of Dalhousie University’s food analysis laboratory, told CTVNews.ca on Saturday. “It is a precedent.

He said he doesn’t think the CDC has recommended such a large price increase in its 54-year history.

Charlebois also said he agrees with the need for a price increase due to supply chain issues caused by the COVID-19 pandemic, but takes issue with how the CDC, a State, presents its recommendations.

“It’s not the farmers who are going to pay,” he said of the additional production costs due to the pandemic. “It’s really Canadian taxpayers and consumers.”

CTVNews.ca was unable to reach the CDC for comment at the time of publication.

Over the past five years, the consumer price of dairy products has increased by 7.4%, compared to 11.8% for meat, 20.6% for eggs and 7.7% for fish, according to the CDC. Supply chain issues and bad weather are to blame for soaring grocery prices, experts say.

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