The Canadian Dairy Commission has awarded dairy farmers a one percent increase in industrial milk price supports for 2014, triggering a fierce reaction from the restaurant lobby.
“Dairy prices in Canada have historically outpaced both the consumer price index and the farmer’s own cost of production,” the Canadian Restaurant and Foodservices Association said in reaction to the announcement. “We have told the CDC that they are pricing dairy off the menu.”
Agriculture minister Gerry Ritz was not sympathetic to the industry critics.
“I always ask my friend Garth White (CRFA president) when was the last time there was a decrease in hotel or restaurant meals?” Ritz said in an interview. “It’s called inflation, it’s called the cost of production. That’s the nature of it. At the end of the day, if you shut down every supply managed farmer in Canada, it would not make a difference to the price of milk on the restaurant table in Canada or the price of chicken at Kentucky Fried Chicken.”
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The minister said if dairy prices increase by one cent, other players in the chain add on.
“At the end of the day the farmers might raise it a cent, the processors will raise it two cents, the retailers will raise it so farmers are a small portion of that,” said Ritz. “It starts the process, no doubt about that, but it isn’t done in isolation.”
Effective Feb. 1, the CDC dairy product support prices for butter and skim milk powder, which are base prices that affect milk prices across the country, will increase one percent.
The price-setter suggested it was a bargain.
“This one percent increase is in line with the consumer price index, which stands at 0.9 percent,” CDC chair Randy Williamson said in a Dec. 17 announcement.
“Over the last year, the cost of producing milk has increased by 1.75 percent. The CDC remains committed to undertaking new initiatives to grow the market for Canadian dairy products.”
Dairy Farmers of Canada said the increase will help the push toward the CDC goal of seeing at least half of dairy farmers cover their full production costs.
The CDC said the support price increases apply to the amount the crown corporation will pay for butter and skim milk powder that is surplus to the Canadian market.
Provincial marketing boards use the federal price support levels as a reference when they set prices for industrial milk used to create products such as butter, yogurt and cheese.
