by SUSAN MANN
The Canadian Dairy Commission has disappointed both dairy farmers and the Canadian restaurant association with its announcement Friday on butter and skim milk powder support price increases.
Dairy Farmers of Canada says the price increase is too low, while the Canadian Restaurant and Foodservices Association called for industrial milk prices to be rolled back 15 per cent to bring prices in line with inflation. Last year the association wanted a 16 per cent cut but the commission announced the prices would stay where they were.
In its press release, the commission says effective Feb. 1 2011 support prices for skim milk powder will increase to $6.2721 a kilogram from $6.1783. The butter support price will rise to $7.1922 a kg from $7.1024. Support prices are the amounts the commission buys and sells butter and skim milk powder to balance seasonal demand changes on the domestic market.
For dairy farmers the support price increase translates into a revenue increase of 1.5 per cent or $1.12 a hectolitre for industrial milk used to make products, such as yogurt, cheese, butter and skim milk powder.
Jacques Laforge, Dairy Farmers president, says dairy farmers haven’t had an increase in the industrial milk price for 24 months. But their input costs have risen. For example, fuel is up 23 per cent, while feed costs increased seven per cent during the past year.
It has been the commission’s longstanding practice to ensure that at least 50 per cent of the dairy farmers participating in the cost of production survey can recover their costs.
To achieve this goal, the commission would have had to raise prices enough to ensure a $3 per hL increase in prices paid to farmers for industrial milk, Laforge says.
With Friday’s announcement only 40 per cent of dairy farmers can recover their costs, he says.
Restaurant association spokesman Justin Taylor says the price increase will drive dairy consumption down even further. Record high dairy prices and low disposable incomes are already driving consumers to choose menu items other than dairy in restaurants. BF
Comments
an online visitor replied on Permalink
US milk retail is $2 gal
--and if you bought 5 boxes of cereal (min. $2 box) they (meijers) give you 2 gal for free...kinda have too laugh when in states as milk is about 50 cents to a dollar cheaper than gas per gal ...supply management would be great if all commodities had it equally...kinda like CAW big 3 guy getting $33 an hr. and local laborer getting $11...when you buy something nobody asks how much you can afford or make...quota has been good for feather and dairy guys for sure but like GM and Chrysler I think its days are numbered.
an online visitor replied on Permalink
Solution
The solution is to let the dairy farmers that aren't making money bid on a buyout....just like the hog guys did. Oh, I forgot, they have millions of dollars of quota to sell, they don't need a buyout. OK, forget that idea, lets open up the industry to new entrants, maybe they can make money....it should be easier if they don't have to buy quota. Maybe that's the problem, the current system is broken, replace it. Do ya think?
an online visitor replied on Permalink
solution
We would love, love, love to be milking cows. Can't do it. Unless you win the lottery, or are left the farm by mom or dad, it ain't going to happen. Even with DFO's new entrant program, you need a sled load of money to get started. And all the new entrant program did was screw it up for the existing guys. We know a farm family who built a new addition to their barn to double their herd size. Now they must buy quota 100 grams at a time to do it - if there is even any available. How long can they cash flow that?
We understand and support supply management, but boy, something went off the rails somewhere. And as for buying dairy products? We only buy cheese and ice cream when it is on sale. There is no way we are paying $8.50 for 500 grams of cheese.
an online visitor replied on Permalink
"broken" depends on who pays the bills
Yet, the system, according to DFO's Bill Mitchell, is far from being broken. Mitchell claims - ".... Canada is keeping its milk marketing system - because it works".
But, I guess if my job depended as much on trying to defend an increasingly lopsided system, as much as Mitchell's job does, I'd probably say the same thing - I'd hate myself for doing so, but.....
Stephen Thompson, Clinton ON
an online visitor replied on Permalink
milk products
When we buy dairy produce in the store it,s either on sale or we won,t buy it. The price is getting out of hand a lot of consumers wages is not going up every year to reflect the price they pay for every thing else, so why is it that they need a raise.
an online visitor replied on Permalink
Prices went up 1.5 percent
Prices went up 1.5 percent while fuel went up 23 percent!
Consumer still pay only about 10% of their wages for food in this country while in some countries it goes up to 50%.
an online visitor replied on Permalink
Technicolour dreams down on the dairy farm
According to information contained in a recent opinion piece by Dairy Farmers of Ontario spokesperson, Bill Mitchell, Ontario consumers are currently paying almost 38% more for milk than US consumers.
In addition, DFO's own information shows the Ontario farm gate price for milk (81.5 cents per litre) to be virtually identical to the US retail price (84.5 cents)
The dairy industry has completely forgotten, and/or has completely ignored, the fact that even many farmers, including myself, are willing to pay a little more for milk in order to be a "good neighbor", but expect our dairy-farming friends to be good neighbors in return - however, forcing us to pay almost 38% more for milk than I'd pay about an hour away in the US, is not being overly "neighborly".
The even-bigger problem for dairy farmers is that for close to 40 years they've been claiming supply management "works" for the consumer because of study, after study, after study, purporting to show Canadian retail milk prices are effectively the same as US retail prices - yet, now DFO is effectively saying "Forget what we've been telling you for 40 years, even though you're now paying 38% more, supply management is just as good for you as it was when you weren't supposedly paying anything more".
Consumers may be somewhat loyal, and they may be somewhat stupid, but a 38% price differential has a profound way of making consumers both smart, and dis-loyal, yet dairy farmers don't seem to be prepared for either possibility.
Stephen Thompson, Clinton ON
an online visitor replied on Permalink
I would rather pay a little
I would rather pay a little more and get good quality, safe milk.
I'm tired of looking at grocery shelves with products from India,
South Africa, etc.
How come everything else like gas, clothes, liquor, books, cars, etc. are so much cheaper in the US?
an online visitor replied on Permalink
AMERICAN DAIRY PRODUCERS
I am not a dairy farmer nor do i hold any other quota. Last time I checked, Canada was still a sovereign country independent of policies set by foreign governments. I do not care what American farmers get for their milk or their eggs or their hogs or what they pay for their fuel. American policy regarding their food supply changes like the wind. Given the opportunity, I would milk cows in a heart beat. I am not jealous of my neighbours who are dairy farmers. I am not jealous of my neighbours who work at hydro and make over $100,000.00 a year. Life is what it is. All this rambling about dismantling supply management is nothing more than talk from certain segments of the agriculutural industry who were NOT ambitious enough or smart enough to set up their own supply managed boards 40 years ago.
an online visitor replied on Permalink
It's the consumers that have
It's the consumers that have to be educated about the quality of
Canadian milk versus the cheaper stuff available south of the border.
an online visitor replied on Permalink
WOW!
We are so perfect aren t we,,keep telling yourself that and you ll be happy in your small small world.
an online visitor replied on Permalink
Safety first
It really depends what is more important in your life. I will not give my kids milk to drink and wonder if there is any melamine in it. Sad that you think cheap is best.
an online visitor replied on Permalink
never happy
Wow 24 months without an increase, how did they ever survive? Now they have something to relate to the rest of the people in the country who didn't get a raise either. At least the million dollar retirement policy is still there.
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