Milk prices in Canada could rise for the second time in a year following a rare request from Dairy Farmers of Canada for a mid-year price hike due to inflation.
Canadian dairy farmers are struggling with unprecedented price increases for the goods and services they need to produce milk, the industry pressure group said in a statement on Thursday.
However, industry observers say people can’t afford another price hike.
Read more: Milk prices rise across Canada as record price increases for farmers begin
They warn that dairy processors are likely to adopt additional increases if the application is approved, raising retail costs to unsustainable levels and increasing food insecurity in the country.
“Businesses are accompanied by these increases, so it’s becoming a double success,” Gary Sands, senior vice president of public policy for the Canadian Federation of Independent Groceries, said Saturday.
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“Canadians are facing very high affordability pressures on commodities like milk and eggs. (Canadian dairy farmers) have lost sight of the impact on the consumer.”
The Dairy Commission of Canada said in a statement on Thursday that it had received a request from Dairy Farmers of Canada in late May to activate the “exceptional circumstances process” and allow for a rise in the price of milk by mid-year. .
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The demand comes after milk prices on the farm rose six cents a liter, or about 8.4%, on 1 February.
The commission said it would hold consultations later this month and issue its decision around June 17.
The federal agency, which oversees Canada’s dairy industry and supply management system, said the milk price increase would be effective Sept. 1, if approved.
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Dairy Farmers of Canada declined to share the amount of increase you are looking for.
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“Lack of transparency is a problem,” Sylvain Charlebois, a professor of food distribution and policy at Dalhousie University, said Saturday.
“They have just assessed the cost of producing milk in Canada and got a record increase. Now they need more blue and give interested parties only a couple of weeks to prepare for the consultations, which will not be public.”
Dairy Farmers of Canada said the price of milk on the farm is adjusted in a fully open process.
“This transparency is one of the many benefits that Canadians get from our supply management system,” the group said.
Dairy prices are usually reviewed once a year in Canada.
This annual process can create a gap between the actual cost of producing milk and the annual adjustment, Dairy Farmers of Canada said.
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“Exceptional circumstances require a half-year adjustment to alleviate this gap,” the group said.
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In less than a year, fertilizer costs have risen 44 percent, fuel has risen 32 percent and animal feed has risen 8 percent, Dairy Farmers of Canada said.
Sands questioned whether the price of milk would be reduced if these entry costs were reduced.
“If these supply chain challenges that drive up costs start to decline in the coming months, will prices go down?” he asked.
Meanwhile, in addition to a proposal to raise milk prices, egg prices are also rising in many provinces.
Read more: Dairy producers push for further rise in record milk price
In a letter to customers on Wednesday, Burnbrae Farms Ltd. he said the farm’s price of eggs produced by regulated farms in Ontario, Quebec, Manitoba, Saskatchewan, Alberta and British Columbia is rising.
The company said the increase in the base price of the required egg table would amount to 18 cents per dozen on all conventional “Grade A” eggs.
That increase is in addition to a 12-cent increase that Burnbrae Farms said it plans to implement on Aug. 28.
Charlebois said rising dairy prices will push consumers into the aisle of dairy alternatives.
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“You will see that the dairy industry continues to decline as more Canadians look for substitutes,” he said.
© 2022 The Canadian Press