TORONTO – The Canadian Dairy Commission (CDC) has recommended a significant increase in the price of farm-gate milk starting early next year, which is expected to increase the cost of milk used to make dairy products for the sectors retail and restaurant business.
The average cost of milk to processors could increase an average of 8.4 percent, according to the CDC in a statement on its website Friday.
Butter is another commodity subject to price adjustment. The support price for butter used by the CDC in its storage programs could increase by 12.4 percent. The CDC says it stores butter to ensure an adequate supply and avoid shortages.
The new prices will only become official after being approved by the provincial authorities, a decision likely to be made in early December 2021.
The recommendations were made after a CDC review of farm gate milk prices and costs within the supply management system, as well as consultations.
“The increase will partially 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 animal feed has increased dramatically, along with the costs of fuel, machinery, fertilizer, seeds for crops and more. “
How much of this will affect consumer prices remains to be seen, but an expert expects significant increases.
Although the CDC regularly recommends price increases, “[8.4 per cent] is a historic high, ”Sylvain Charlebois, director of the agri-food analysis laboratory at Dalhousie University, told CTVNews.ca on Saturday. “It’s a precedent.
He said he didn’t think the CDC recommended such a big price hike in its 54-year history.
Charlebois also said he agreed with the need for a price increase due to supply chain issues caused by the COVID-19 pandemic, but disputes the way the CDC, a company in State, presents its recommendations.
“It is not the farmers who are going to pay,” he said of the additional production costs due to the pandemic. “It really is 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 risen 7.4% from 11.8% for meat, 20.6% for eggs and 7.7% for fish, according to the CDC . Supply chain issues and inclement weather are behind the soaring prices for groceries, experts say.