Canadian milk prices could rise for the second time in a year after a rare request from Canadian dairy farmers to raise prices in the middle of the year due to inflation.
The industrial lobby group says Canadian dairy farmers are struggling with unprecedented increases in the prices of goods and services they need to produce milk.
Still, industry observers say people can’t afford another price increase.
They warn that dairy farmers are likely to make further increases if the request is approved, raising retail costs to unsustainable levels and increasing food insecurity.
“Companies have been added in addition to these increases, so this is becoming a double hit,” said Gary Sands, senior vice president of public policy at the Canadian Federation of Independent Grocers, on Saturday.
“Canadians are facing very significant pressures on accessibility. They have lost sight of the impact on consumers. “
The Canadian Dairy Commission said Thursday it had received a request from Canadian dairy farmers in late May to launch an “emergency process” and allow a rise in milk prices in the middle of the year.
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The demand comes after the farm’s milk prices rose by six cents a liter, or about 8.4 percent, on February 1st. Dairy prices are usually reviewed once a year.
The commission said it would hold consultations later this month and issue a decision around June 17th.
The federal body that monitors Canada’s dairy industry and supply management system has said the increase in milk prices will take effect on September 1.
“Lack of transparency”
Dairy farmers in Canada declined to say how much they are pushing for.
“Lack of transparency is a problem,” Sylvain Charlebois, a professor of food distribution and policy at Dalhousie University, said on Saturday.
“They have just estimated the cost of milk production in Canada and have seen a record increase. Now they suddenly need more and give stakeholders only a few weeks to prepare for consultations that will not be public. “
Holstein cow grazes on a dairy farm near Calgary in 2016 (Jeff Mackintosh / The Canadian Press)
Canadian dairy farmers said in a statement Thursday that the price of farm milk is being adjusted in a completely open process.
“This transparency is one of the many benefits that Canadians receive from our supply management system,” the group said.
The usual review of prices once a year makes a difference between the real cost of milk production today and the annual adjustment, said Canadian dairy farmers.
“Exceptional circumstances require a mid-year adjustment to mitigate this gap,” the group said.
In less than a year, fertilizer costs have risen by 44 percent, fuel has risen by 32 percent and animal feed has increased by eight percent, Canadian dairy farmers said.
Sands doubts whether the price of milk will be reduced if these incoming costs are eased.
“If these supply chain challenges that increase costs start to subside in the coming months, will they reduce prices?”
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