Dairy discount designed to make pizza cheese cheaper

Mozzarella discount | Farmers and restaurateurs approve of move 
that reduces costs for mozzarella processors buying Canadian milk

Canadian milk processed into mozzarella cheese will be discount priced effective June 1.

The move is designed to deal with persistent restaurant complaints that high cheese prices are driving their members out of business.

The Canadian Dairy Commission announced the new 3(d) milk class last week, and it estimated it could reduce processor milk costs and dairy farmer income by as much as $27 million annually.

However, dairy farm leaders and the restaurant industry, which has often has been a vocal critic of supply management, say all sides win in the deal.

The compromise was announced just days before the dairy farmer lobby lost a bid before the Canadian International Trade Tribunal to block import of mozzarella cheese from the United States that is packaged with pepperoni to avoid high import tariffs for cheese.

Dairy Farmers of Canada president Wally Smith said the mozzarella pricing deal announced last week and the CITT case were not connected, despite critic assertions otherwise.

Smith, supported by others involved in the agreement, said discussions have been underway for more than a year and long before the CITT case started.

He said the agreement to allow a new lower-priced milk class designated for mozzarella production will help producers by increasing processor purchases of Canadian milk.

It will also increase the overall health of the Canadian dairy industry, he said.

“If we sell more pizza using Canadian cheese, that means more milk purchases by processors,” said Smith. “It is a win-win for the entire industry.”

The Canadian Restaurant and Foodservices Association also argued that all sectors win. It has campaigned long and hard for cheaper Canadian milk and cheese prices to compete with frozen pizza manufacturers that have had access to much lower cheese prices.

“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.”

There was a more exultant tone on the CFRA website, suggesting that further attempts to reduce dairy product prices will follow this “first step.”

The web message proclaimed “cheaper cheese” for restaurateurs making pizza.

“CRFA has negotiated this new cheese price to help offset the discount that frozen pizza manufacturers have enjoyed for many years,” said the message.

“CRFA has been the only business association fighting for fair dairy prices for restaurant owners. This is a great first step.”

Dairy commission communications official Carole Cyr said that while many considerations go into the cost of mozzarella cheese to restaurants, the price discount should be worth five to 10 percent in milk purchase costs to processors.

She said at the restaurant level, it depends on how much of the discount saving is passed on from processors to restaurant customers.

Restaurants will have to register with the CDC to be eligible for cheaper mozzarella.

“If they register, they should see the bulk of this benefit passed down to them,” said Whyte.

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