(Ottawa) The Canadian Dairy Commission announced Wednesday that it is delaying a planned increase in farm milk prices by three months, as the food industry faces pressure to stabilize food prices.
The 1.77% increase, normally scheduled for the beginning of February, will come into force on 1er May, and will result in an increase of just over 1 cent per liter of milk.
Inflation affects Canadians and the entire value chain of the dairy sector, from the farm to the consumer’s plate, underlined the president of the CDC, Jennifer Hayes, in a press release.
“The CDC always strives to balance the impact on consumers with the sustainability of the dairy industry. »
The Commission, a crown corporation, reviews the price dairy farmers receive for their milk each fall.
Price adjustments normally come into effect the following February.
In October, the CDC ruled that, under its pricing formula, the farm price of milk could increase by 1.77% in February.
Ahead of the annual price announcement, the Canadian Federation of Independent Grocers called for a pause on the price increase, arguing the food industry was in an exceptional situation this year.
The Federation’s call triggered a mechanism that set aside the results of the pricing formula in favor of setting a price based on consultation among stakeholders.
About a week later, the Dairy Farmers of Canada also recommended delaying the price increase.
Vice-president Gary Sands, senior vice-president of the Canadian Federation of Independent Grocers, applauded the decision.
“They’re hitting the pause button, and we think that’s appropriate,” he said.
“Right now we are all trying to achieve price stability. […] I think they took a very cautious course of action. »
Mr Sands warned, however, that a pause in farmgate milk prices did not mean retail dairy prices could not still rise in the meantime. Farm milk, which is used to make many products including milk, cheese and yogurt, is just one of many factors that go into the prices dairy processors charge retailers , he recalled.
Canada’s food supply chain is under pressure from the federal government to keep prices stable amid high inflation and rapidly rising interest rates, which have increasingly squeezed consumer budgets.
Like consumers, dairy producers have also felt the pressures of inflation, underlined the CDC in a press release: “Despite the stabilization of the costs of livestock feed, fuel and fertilizers, the gains of producers have been offset by higher interest rates. »
Mr Sands said that as May approaches, the Commission should reassess whether a price increase is appropriate. If not, he said he would push to delay the increase further.
With the Commission’s announcement, other supply-managed sectors — chicken and eggs — will likely also be under pressure to suspend their price increases, Sands observed.