The Canadian Dairy Commission has agreed to raise milk prices for the second time this year, which is a rare occurrence.
Posted at 4:27 p.m.
The Crown, which oversees Canada’s dairy supply management system, said Tuesday that milk prices will rise by about two cents per liter, or 2.5%, at 1.Verse September.
The increase comes after milk prices rose six cents a liter, or about 8.4% on 1 .Verse February.
The commission said that when it revises prices in the fall, a mid-year price increase was approved for 1Verse September will be deducted from any modification for next February. Prices are generally reviewed once a year.
The move follows a May request from dairy farmers in Canada to raise milk prices in the middle of the year due to rising inflation.
The industry lobby said farmers are facing unprecedented price increases for the goods and services they need to produce milk.
The commission said in a note to stakeholders, including processors, retailers and restaurants, that higher milk prices would partly offset higher production costs due to inflation.
“Feed, energy and fertilizer costs have been hit hard, with increases respectively of 22%, 55% and 45% since August 2021,” the commission said.
The real increase in the price of milk for consumers can be much higher, as various actors in the supply chain can also apply additional price increases.
The Commission said the impact of these adjustments on retail prices will depend on many factors such as manufacturing, transportation, distribution and packaging costs throughout the supply chain.
However, the increase approved by the dairy committee is much lower than some industry watchers had been expecting.
“It could have been worse,” said Sylvain Charlebois, professor of distribution and food policy at Dalhousie University.
“Based on the data we looked at, we expected a 5% increase. I was expecting a lot more.”
In recent weeks, the Dairy Committee has come under pressure from various industry stakeholders to keep prices affordable for Canadian consumers.
“The Canadian Dairy Commission has begun to listen to Canadians and their concerns about food inflation,” Charlebois said. The CDC has tried to find a balance between the needs of the industry and what consumers feel. »
Meanwhile, Agriculture Minister Marie-Claude Bebeau, in a letter of authorization sent to the chair of the Canadian Dairy Commission in mid-April, stressed the need for more transparency.
MI Bebo said one priority is for the board to review its approach to milk pricing decisions to ensure clearer and more transparent communication with Canadian consumers and dairy stakeholders.
The authority issued a press release regarding the increase in milk prices on the farm, in addition to informing the concerned authorities of the price adjustment through a memorandum of understanding.
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