For the past two years, Manitoba dairy farmers have the dubious distinction of receiving the lowest prices in the country for fluid milk.
They intend to take up their case with the provincial agriculture minister after a recent increase failed to bring their prices in line with those received by farmers in other provinces.
“There is no pride to being the lowest price in Canada,” said Jim Wade, general manager of Manitoba Milk Producers.
“There is no reason for it, either.”
Wade said farmers are happy that their prices inched up by $1.06 per hectolitre as of April 1 to a total of $64.28 per hL.
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“It’s a welcome increase. There’s no doubt about it,” said Wade.
But they aren’t pleased with the way the Manitoba Milk Prices Review Commission adjusts milk prices.
They believe the formula used by the commission doesn’t adequately reflect their cost increases.
“The fluid milk price is becoming a drag on the dairy farm right now,” he said.
Before the price increase, Manitoba prices lagged $1.57 per hL behind fluid milk prices in the West and at least $3.42 per hL behind prices in Eastern Canada.
Wade said the lower prices have held back some of the development that could have occurred in Manitoba. If Manitoba farmers had received prices $1 per hectolitre higher last year, they would have had $1.5 million to reinvest back into their farms to make them more competitive.
Now, provincial prices are 51 cents per hL less than neighbors to the west and $2.36 per hL less than neighbors to the east, leaving farmers short at least $500,000 per year, said Wade.
The costs Manitoba dairy farmers face for equipment, supplies and labor are similar to those in other western provinces, said Wade.
He said the milk marketing board has been trying to work with the provincial commission on pricing issues since January 1999.
Now, farmers want to take their arguments to Rosann Wowchuk.
Wade said farmers would like the authority to negotiate fluid milk prices directly with processors, as they do for industrial milk used in cheese and yogurt.
But the chair of the Milk Prices Review Commission said there are good reasons to have government oversight of prices established by monopoly sellers.
Daryl Kraft said the federal government monitors and establishes base prices for industrial milk, too, on behalf of consumers.
Kraft acknowledged the price disparity between Manitoba and other western provinces.
Manitoba prices are based solely on surveys of producers’ and processors’ costs, he said, while the other western provinces use a formula that considers general economic indicators.
He said surveys of dairy farmers’ costs in Alberta and British Columbia suggest their actual costs are lower than what their formula reflects.
Kraft also noted that while Manitoba farmers receive lower prices, their returns are pooled with other provinces.
