Farmgate: Questions about upcoming increases for dairy products

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I got a text earlier this month and thought the questions asked deserved a column, so here goes.

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1. “Dairy products should increase by 15% in stores. I was wondering what is the expected farm raise you will receive? »

Effective February 1, the farm gate milk price will increase by 8.4% or 6.3 cents per litre. If store prices rise above that, blame the processors, wholesalers, retailers, transporters, etc., for taking the opportunity to get a raise and passing it on to the farmers.

That being said, we all know that everything has gone up in price, so we expect that after our increase begins, the deductions we pay to the Dairy Farmers of Ontario will go up as well. We are certain that at least the administration and transport costs (we pay to deliver our milk to the processor) will increase per hectolitre. We may end up with about half the increase or about three cents a liter to cover our rising input costs.

2. “The most recent carton of milk we received simply says ‘Dairy Farmers of Canada Organic’. How do we know if it’s purely Canadian? Labeling needs to be clearer.

The product label must display a rectangular blue logo containing the silhouette of a cow with a maple leaf on its belly, signifying that the product is or is made from 100% pure Canadian milk. This logo replaces the old blue “dancing cow”. If it says “Organic from Dairy Farmers of Canada”, it must be 100% pure Canadian organic milk (or butter, cheese, yogurt, etc.). If it says “Product of Canada”, the same. Processors are encouraged to put this logo on all packaging to identify it as Canadian, but some are still hesitant to spend the money to have it added. Not sure? Call the company.

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3. “Also, will non-Canadian milk have an impact on price increases?” Could people buy cheaper American milk? »

Importing milk and dairy products from foreign countries, not just the United States, does not affect the price paid to Canadian dairy farmers for their milk. However, this has an impact on our quota.

As you know, Canadian farmers buy milk quota at a fixed price of $24,000 per kilogram of butterfat in order to sell milk. The quota a farmer holds is the amount of milk he can ship containing that specific amount of butterfat per day. It resets every day. On a monthly exchange, farmers can purchase a minimum of 0.10 kilograms or up to 10% of their current holdings, depending on the amount available for sale by farmers who are quitting or downsizing. The rules divided the available quota between those who wanted to buy, new producers entering with assistance and new producers. Currently, most exchanges allow us to buy only 0.10 kilograms, and twice this year the exchange was canceled due to insufficient sales quota.

DFO has a quota “float” and balances the supply of Canadian milk with demand by occasionally granting increases or decreases in certain percentages to Ontario dairy producers. Last June, we all received a 1.5% quota increase in our holdings as the demand for milk increased. Last Thursday, we were advised that effective December 1, there is a 1% decrease as expected milk demand did not occur – COVID-19 is to blame and a slow business recovery. In all likelihood, imports also influenced it. As more milk and foreign products come in, it decreases our need for domestic milk. These increases cost the farmer nothing, but when quota cuts occur, we are not reimbursed for what we have lost, even if it is quota that we have purchased.

I know that cheese and products made in the United States are currently available for sale in Canada (Anderson’s and Annie’s come to mind), but I have no idea if American fluid milk will be on sale here or no.

If so, it will not meet the same standards that Canadian dairies are required to meet, nor will it be cheaper.

About Thomas B. Countryman

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