After years of lobbying by the Canadian restaurant industry, the Canadian Dairy Commission says industrial milk destined for mozzarella cheese production will have a lower price effective June 1.
The benefit to processors could be as much as $27 million annually in lower prices, the CDC estimates.
To benefit from the lower price, restaurants that have pizza as a key menu item will have to register with the CDC.
Dairy Farmers of Canada president Wally Smith says that while prices for some milk will fall, it should increase demand for Canadian milk and increase farm and food industry sales.
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“If we sell more pizza using Canadian cheese, that means more milk purchases by processors,” he said today. “It is a win-win for the entire industry.”
If the benefit of the lower price is passed onto restaurants, the benefit could be a five to 10 percent reduction in the price of the key pizza ingredient, CDC communications official Carole Cyr said. “It depends on what part of the rebate is passed on.”
Announcement of the new cheaper 3(d) price class is an attempt to close the gap between the special price for cheese paid by frozen pizza manufacturers and the prices charged to restaurants that make pizza on-site.
The Canadian Restaurant and Foodservices Association has argued for years that the gap between special prices for frozen pizzas sold in stores and fresh pizzas in restaurants is hurting the restaurant industry.
“This is a major step forward and our members are ecstatic,” CRFA president Garth Whyte said.
“It really does show that if different parts of the industry work together, we can find solutions that benefit us all.”
The CRFA has often been a major critic of the supply management system and the influence that Dairy farmers of Canada has on the CDC that sets prices.
Currently, former DFC president Jacques Laforge is dairy commission chair.
When he was appointed, Whyte expressed skepticism that he would be objective and not just side with dairy farmers.
He now says Laforge was key to working out the compromise.
“I have built a wonderful relationship with him,” Whyte said. “He is respected on both sides. He is one of the few people who could have pulled this off.”
