The Canadian Dairy Commission has announced a 1.5 percent increase in the price dairy farmers will receive for industrial milk used to make dairy products, effective Feb. 1.
Although provincial milk boards set fluid milk prices, they usually are influenced by federal industrial milk support prices.
Dairy Farmers of Canada immediately complained that the increase is too little since the price of dairy farm input costs have risen much more than 1.5 percent since the last dairy price increase in 2009.
The Canadian Restaurant and Foodservices Association, one of the most consistent critics of the supply management system, said the increase was unacceptable. It had recommended a price rollback to bring dairy price increases down to the inflation rate over the past 16 years.
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It is the annual battle between dairy farmers and supply management critics when the CDC makes its year-end announcement about the price at which it will buy and sell butter and skim milk powder to regulate dairy prices.
It said the price will increase by 1.12 cents per litre of milk used to make products such as yogurt, butter and cheese because production costs are rising.
“The current situation is that farm revenues are lagging behind cost increases, especially since there was no rise in support prices last year,” CDC chair Randy Williamson said in a statement announcing the increase.
He also said the margin received by processors for skim milk purchased by the CDC will increase 1.5 percent because of higher costs.
Dairy Farmer president Jacques Laforge said the small increase will mean more dairy farmers are not covering their costs. Since the last increase, fuel prices have increased 23 percent and feed costs went up seven percent last year, he said.
CRFA president Garth Whyte said since 1994, the inflation rate has increased 34 percent, dairy production costs by six percent and industrial milk prices by 59 percent.
He said higher prices are driving consumers away from dairy products.
