Tuesday, September 27, 2022

Milk prices may rise again as dairy farmers seek second cost hike this year. Nation World News

Milk prices in Canada could rise for the second time in a year after Canadian dairy farmers made a rare request for a mid-year price hike due to inflation.

Canada’s dairy farmers are grappling with never-before-seen price increases on goods and services needed for milk production, an industry lobby group says.

Yet industry observers say people cannot afford another price hike.

They have warned that if the request is approved, dairy processors will work on additional increases, pushing retail costs to unsustainable levels and increasing food insecurity.

“Companies piggyback on top of those growth, so it becomes a double hit,” Gary Sands, senior vice president of public policy with the Canadian Federation of Independent Grocers, said Saturday.

“Canadians are facing very significant affordability pressures. They have lost sight of the impact on the consumer.”

The Canadian Dairy Commission said on Thursday it received a request from Canadian dairy farmers in late May to begin the “extraordinary conditions process” and allow a mid-year increase in milk prices.

look | Poll shows Canadians are changing shopping habits due to rising food prices:

Milk prices may rise again as dairy farmers seek second cost hike this year. Nation World News

Poll shows Canadians are changing shopping habits due to rising food prices

A survey by Angus Reed shows that Canadians are eating less and changing what they buy at the grocery store in response to higher food prices.

The request comes after farm gate milk prices were increased by six cents a litre, or about 8.4 per cent, on February 1. Dairy prices are usually reviewed once a year.

The commission said it would hold deliberations later this month and issue its decision around June 17.

The federal body that oversees Canada’s dairy industry and supply management system said the increase in milk prices would take effect from September 1.

‘lack of transparency’

Dairy Farmers of Canada declined to share how much of the increase it is seeking.

“Lack of transparency is a problem,” said Sylvain Charlebois, a professor of food distribution and policy at Dalhousie University.

“They assessed the cost of milk production in Canada and pushed through record growth. Now out of the blue they need more and they are giving stakeholders only a few weeks to prepare for the consultation, which will be available to the public.” Not going to happen.”

Milk prices may rise again as dairy farmers seek second cost hike this year. Nation World News
A Holstein cow stands in pasture at a dairy farm near Calgary in 2016. (Jeff Mackintosh/The Canadian Press)

Dairy Farmers of Canada said in a statement on Thursday that the price of the milk farm gate is adjusted in a fully open process.

“This transparency is just one of the many benefits our supply management system brings to Canadians,” the group said.

Dairy Farmers of Canada said the once-a-year normal price review today creates a gap between the actual cost of milk production and the annual adjustment.

“Extraordinary circumstances require a mid-year adjustment to bridge this gap,” the group said.

Canada’s dairy farmers said in less than a year the cost of fertilizer has risen 44 per cent, fuel has risen 32 per cent and animal feed has risen by eight per cent.

Sands questioned whether reducing those input costs would bring down the price of milk.

“If the supply chain challenges that drive up costs start to ease in the coming months, will they drive prices down?”

Nation World News Desk
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