OTTAWA (Staff) — Canadian dairy farmers learned last week they will not be receiving increased prices for their processing milk, at least until Aug. 1, even though their costs of production have been rising.
The Canadian Dairy Commission announced Feb. 1 that the support price for industrial milk (used to produce butter and skim milk powder) will remain at $50.76 per hectolitre of milk containing 3.6 kilograms of butterfat.
A statement from commission chair Roch Morin said “now is not the time for adjustments to dairy prices. We have to balance the interests of consumers, processors and producers and we do not want to threaten the recent growth we have seen in the market for dairy products.”
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federal government proposed several months ago to increase the compensation rate from 80 to 90 per cent and double the maximum payment from $3 million to $6 million
The dairy farmers’ lobby disagreed with the commission.
Dairy Farmers of Canada president Peter Oosterhoff said the existing formula does not accurately reflect rising costs. A new formula has been accepted for use beginning Aug. 1 and it would have triggered a price increase.
And a price increase will not undermine consumer demand because farmers have been actively developing new markets, he said.
“Clearly, the current decision does not recognize that there have been increases in the costs of efficient producers,” said Oosterhoff.
During the past five years, the consumer price index has increased 14 percent while the milk target price has gone up half that, he said.
