Canadian Dairy Commission delays farmgate milk price hike by three months
OTTAWA –
The Canadian Dairy Commission is delaying a deliberate enhance to the farmgate worth of milk by three months because the meals trade grapples with stress to stabilize meals costs.
On Wednesday, the dairy fee stated a rise of 1.77 per cent will go into impact on May 1, 2024, as an alternative of February 1, when it will usually happen. The enhance interprets to simply over a cent per litre.
Inflation is affecting Canadians and the complete dairy provide chain, from farmgate to customers’ plates, stated CDC chair Jennifer Hayes in an announcement.
“The CDC always strives to balance consumer impacts with sustainability of the dairy industry.”
The fee, a Crown company, opinions the value dairy farmers are paid for his or her milk each fall. Price changes usually come into impact the next February.
In October, the fee stated that in line with its pricing system, the value of milk on the farm degree might go up by 1.77 per cent in February.
Ahead of the annual worth announcement, the Canadian Federation of Independent Grocers known as for a pause in worth will increase to farmgate milk, saying the grocery trade is in an distinctive state of affairs this 12 months.
The CFIG’s name triggered a mechanism that put aside the outcomes of the pricing system in favour of setting a worth primarily based on consultations with stakeholders.
About per week later, the Dairy Farmers of Canada additionally beneficial delaying the value hike.
Gary Sands, CFIG’s senior vice-president, stated he applauds the choice.
“They’re hitting the pause button, and we think that’s appropriate,” he stated.
“Right now, we’re all trying to achieve price stability … I think they’ve taken a very prudent course of action.”
Sands cautioned although {that a} pause in farmgate milk costs doesn’t suggest retail costs for dairy merchandise could not nonetheless rise within the meantime. Farmgate milk, which is used to make many merchandise together with milk, cheese and yogurt, is simply one of many many various elements that goes into the costs charged to retailers by dairy processors, he stated.
Canada’s meals provide chain is beneath stress from the federal authorities to maintain costs regular after excessive inflation and a speedy rise in rates of interest have more and more squeezed customers’ budgets.
Like customers, dairy farmers have additionally been feeling the pressures of inflation, the CDC stated in an announcement: “Despite stabilizing feed, fuel and fertilizer costs, producer gains were offset by higher interest rates.”
Sands stated as May attracts nearer, the fee ought to reassess whether or not a worth enhance is acceptable. If it is not, he stated he’ll push to additional delay the hike.
With this announcement by the dairy fee, the opposite supply-managed sectors – rooster and eggs – will doubtless even be beneath stress to pause worth will increase, stated Sands.
This report by The Canadian Press was first printed Nov. 1, 2023.
