Dairy blend price increase takes effect in February

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The announcement about reductions in skim milk support prices skirts all around, but studiously avoids mentioning the connection between this support price reduction and the fact that, thanks to the spectacular ineptness of supply management, 800,000 litres of skim milk went into lagoons earlier this year.

Why doesn't the dairy industry admit that they had to do something drastic to try to get rid of skim milk, especially since they're getting their shorts fed to them on a plate via uncontrollable imports of duty-free milk protein replacements, or they'd be fed a double-helping of their shorts on a plate if a similar dumping happened again any time soon?

And, of course, the combination of spectacular ineptitude and odious partisanship of the Canadian Dairy Commission and/or the Dairy Farmers of Ontario was made, once again, patently-obvious with the statement, just before Christmas, that dairy farmers "deserved an increase" in the blend price of milk - don't consumers even-more deserve at least to be recognized instead of being treated as sponges to be squeezed increasingly-harder by greedy and uncaring dairy farmers?

Stephen Thompson, Clinton ON

The claim by the Canadian Dairy Commission (CDC) that the cost of production has increased for dairy farmers neatly avoids any consideration of one key aspect of the cost of producing anything - volume.

It is basic economics and common sense (another term for basic economics) that the per-unit cost of producing something goes down as the volume produced goes up. This is partially because of economies of scale for the variable inputs as well as the ability to allocate fixed costs over increased units of production.

The same thing applies in reverse - cost of production goes up when volumes go down.

The basic fraud of cost-of-production is that because costs are covered, there is no incentive to reduce them, thereby creating a "ratchet-effect" which is that an initial price increase (the creation of supply management) causes a reduction in consumption which increases the cost of production which causes an increase in the price which causes a further reduction in consumption and so-on, ad infinitum, or until, forty years later, we have farm gate and consumer prices that bear no relationship whatsoever to the real world of cross-border shopping.

Therefore, when the CDC claims the cost of producing milk has increased by 3.11% in 2015, they disengenuously never reveal any information outlining how much of that increase is due to declining Canadian milk production caused by:

(A) the seemingly-unstoppable imports of duty-free milk protein replacements
(B) the recent approval to import of almost 9 million pounds of butter.
(C) increasingly-disgruntled Canadian consumers fleeing to the US where consumers, as in the long-ago McDonald's jingle -"You deserve a break today", actually get a break, whereas, in Canada, the only people who appear to "deserve" anything, are greedy dairy farmers.

It's almost criminal that the CDC can demand, and get, price increases for no other apparent reason than because the last price increase and basic flaws in the system, caused a quite-understandable cut in production.

Stephen Thompson, Clinton ON

It's a well known fact that dairy farmers are the deepest in debt compared to any other type of farmer in Canada.
In 2015 all farms saw borrowing costs fall by 30 basis points, fuel by 40% and grains(feed costs) are also down. These expenses rank second, third and fourth after the biggest cost of all for dairy.....quota.(also the biggest cost paid by consumers)
This price increase the boys and girls are granting themselves is only proof of how close to financial collapse many dairies are, even in todays low cost environment.

Raube Beuerman

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